The July jobs report on Friday was a major disappointment as the economy lost 23,000 jobs in July while the expectation was for 80,000 jobs to be added. But bad economic news is now good news for the stock market, at least for the time being, as a weaker labor market means the Fed will be less likely to hike rates. Fewer jobs is also naturally deflationary as people who are not in the work force will not be spending as much money, reducing demand. Odds of a rate hike came back down after the jobs data with another no change in rates decision being the current favorite at about 55% for the next meeting on September 16th. The markets took this as a positive and the Nasdaq led on Friday with a gain of 1.3% while small caps were also very strong with the Russell 2000 adding 1.1%. Meanwhile the S&P also added 0.62%. The VIX closed down again, losing 1.7% to finish at $14.90. This was the lowest close for the VIX since January 9th.
The Nasdaq did not break through its primary uptrend on Friday so it doesn't start any new daily trends going into Monday's session. The only daily resistance to watch will be from its primary uptrend (white) around 26,925 on another rally. On a pullback, the first support to watch will be from its prior uptrend (purple) at 26,600-26,625. If that doesn't hold, the last daily support likely in play for tomorrow would be at its primary uptrend (white) around 26,325.
The S&P also remained within its primary daily uptrend so it doesn't start any new ranges either. Its primary uptrend (white) will be the only resistance to watch, however it's very far away at about 7,930 so it's unlikely that it actually gets tested. Instead, it will likely just continue to trade within this range until it breaks to the downside to start a new trend. The first support to watch will be from this primary uptrend at about 7,660 on Monday. If it doesn't hold, its next support will be at about 7,645 from its prior sideways range (yellow). The last support will be from its next sideways range (purple) around 7,585 if we see a larger pullback.
The Russell 2000 also remained within its primary uptrend on Friday so it also won't start any new daily trends for tomorrow. All of its prior trends also remain intact for now so there will be a lot of levels to watch here. First we'll look at resistances on another rally attempt. Its prior uptrend (yellow) will be the first level to watch around 3,035 which is just above Friday's close of 3,034.49. If it gaps up tomorrow above the 3,035 area then it will act as support and the next resistance to watch will then be at 3,063 from its next uptrend (purple). After that, its primary uptrend (white) will be resistance at 3,066. If it can break through this as well, its prior uptrend (yellow) comes into play again from the top of the range at about 3,075.
On a pullback, the first support to watch will be from its prior downtrend (orange) around 2,982. If this doesn't hold, its primary uptrend (white) would be next at about 2,964. These will likely be the only two supports in play if we get a sell-off tomorrow, and there would be more from its prior downtrend (blue) at 2,935 if the first two don't hold.
