On Friday, March 6 the US jobs report hit the wires. Equities were trading
higher in premarket, and the previous session we had seen strong selloff followed
by an equally strong high-volume rally. No one was expecting the massive selloff
that was about to hit the stock market when the good jobs numbers were posted.
Later that day after 6 1/2 hours of heavy volume selling in the stock market
the closing bell rang. The big selloff pulled most stocks and commodities into
an extremely oversold market condition. Traders were waiting all day for some
type of bottom to be put in place so they can reenter a long position and day
trade the rebound.
But as we learned when the closing bell was ringing, there was no bottom and
there was no bounds in equities. From looking at my trading platform dashboard
virtually every stock sector country and commodity ETF was trading sharply
lower.
Only four things were green on my dashboard. The first one was the VIX which
makes sense as people become fearful the sell stocks and the volatility index
rises. But what was interesting was that the other three were food commodities.
The first commodity trading higher was coffee. This makes sense because it
was a stressful day and everyone was drinking coffee. The second was sugar.
Obviously the majority of coffee drinkers enjoy sugar in their coffee.
The last commodity which rallied late in the day was the ETF cow. Cow is a
livestock commodities fund. And so it seems after a long hard in the financial
market we find comfort in a big juicy steak. Subscribers to my newsletter and
I just happened to get long this fund recently. The chart from a technical
stand point is very bullish.
On a more serious side of things... though, the stock market is still in an
uptrend. Today's news was a surprise and surprised data will always cause a
severe reaction in the market. History has proven that news based selloffs
tend to be a blip on the chart and market recovers within a couple days and
the previous trend once again continues.
After the weekend when the stock market reopens and traders had time to digest
the news about the FED possibly raising rates if the economy continues to show
strength it is going to be interesting to see how the market reacts. My guess
is that we see higher prices early next week for US equities.
