It was a slow session, which is typical in the week we get the jobs report. In fact, there is normally one session where the market is down noticeably, and there is e-rotation into safe havens sectors.

Breadth

Market breadth was decidedly negative for the NASDAQ underscoring a major frustration with stocks that stair step higher but take elevator lower.  Often worth the ride, but it’s no fun.

Market Breadth	NYSE	NASDAQ
Advancers	1,420	1,578
Decliners	1,906	3,125
New Highs	120	78
New Lows	25	83
Up Volume	1.74 billion	1.84 billion
Down Volume	2.62 billion	3.54 billion

Oil stocks were higher as crude made a huge bounce off recent pullback.  The violent moves in crude are contained to a decided trading range but speak to all the minute to minute confusion.

Speaking of oil – President Biden is looking to release a million barrels a day for six months from the strategic petroleum reserve.  This will lower crude for a moment, but the solution is to pause the war on oil.

I understand President Biden sees poll numbers, and after blaming everyone but his own policies, he has to try and move the needle ahead of the midterms. Its nuts not allow US oil companies come to the rescue for the American public.

Personal Income & Spending

Personal income for February came in at consensus +0.5% but spending of +0.2% was well below Wall Street’s 0.5% expectation.  This as inflation grew 6.4% from a year ago climbing to the highest level since 1982.  Responding to persistent inflation, consumers decided to pad savings lifting the rate to 6.3% from 6.1%, but remember the rate was 26.6% back in March 2021.

Spending increased in food and gasoline reflecting prices, but recreational services stand out as evidence that YOLO (you only live once) feeling is coming back.

Despite the spike in this morning’s inflation news, the five-year breakeven are turning lower.   I suspect inflation is peaking, but that’s not the same as going away.

 

Watching the NASDAQ

As I mentioned above, the wild gyration in the NASDAQ is shaking lots of investors out of the mix.

Watching the Russell 2000

Wow, look at that 210 number on IWM (Russell 2000 ETF), it held as support on a number of occasions last year and is now key resistance.  Above that level, I’m looking for 217 (200-day moving average) as the next big test.

Portfolio Approach

We closed several positions yesterday and currently have 20% cash position in our Hotline Model Portfolio.

 

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