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Remembering Resistance

I doubt many people are watching the market today. Sandwiched between Independence Day and the weekend, this trading session will probably grind along much like the other low-volume trading days we’ve seen so far this week…

That’s why I wasn’t particularly excited when I saw futures ripping higher early this morning. The broad market remains below its 50-day moving average. And while price remains important, I just can’t put too much weight on this week’s action so far.

But even though we’re dealing with an orphan trading day, some important data is sneaking up on us this morning.

Jobs numbers trounced estimates, helping to propel futures higher early this morning. The U.S. economy added 195,000 jobs in June, according to the Wall Street Journal, while the unemployment rate stays steady at 7.6%. The broad market is looking open significantly higher on this positive news—maybe as much as 1%.

That’s fine. Just don’t get too emotionally invested as stocks pop higher. There’s still plenty of resistance this market needs to deal with before we can declare this current correction officially over.

The financial pundits are all screaming “BUY!” this morning. I’m urging caution. Let the summer chop grind along, eating up overzealous investors along the way. There will be better buying opportunities than this in short order…

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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