The Week Ahead: Is This The Stock Market's Secret Weapon?

February 07, 2016 | February 2016 Bond Updates

The bumpy ride for the stock market has continued in February as the upside reversal on Wednesday failed to stimulate much new buying. Still it was supportive that the major averages were able to recover substantially from the Wednesday lows as after Tuesday's drop the bearish sentiment had spiked as there was heavy put buying Tuesday. Individual investors also became less positive last week as the bullish% dropped 2.2% to 27.5% and could drop further this week though doubt it will go below the low of 17.9% on January 14th. The bearish% dropped 5.2% to 37.3% as the neutral camp rose 7.5%. The S&P 500 had dropped down to the 1872 level in early trading Wednesday but then was able to close 40 points higher at 1912. Now the focus is on Wednesday's early lows as a drop below these levels would be a strong sign that the rebound from the late January lows was over. These lows were tested Friday but the market managed to close above the lows. The weaker than expected jobs report did not help as the stock market opened a bit lower on Friday and the selling picked up as the day progressed. The number of new jobs was about 30,000 less than economists expected though the unemployment rate did drop to 4.9%. The three month average gain of 231, 000 jobs is still moderately healthy.

View more at: http://www.forbes.com/sites/tomaspray/2016/02/06/the-week-ahead-is-this-the-stock-markets-secret-weapon/