Hello everyone
Today’s Jan-28 stock market action resulted in the SP 500 index trading above yesterday’s range, and on (slightly) above average volume. This is a positive development, and a desired change in the water temperature after multiple days of losses. It closed above 1790, which is a level that I believe to be important, and closed at 1792.50. The next level I am watching is 1806, as that is the 50-day Moving Average of the SP 500 index, any close above that, and we can all breathe somewhat easier. In light of AAPL’s poor performance, the indexes displayed complimentary strength. Overnight markets in Asia (open while America is closed) are trading positively, which is a good sign.
As most know, tonight was the State of the Union Address, and the discussion was basically about jobs (job creation, training, education) and energy (move automobiles to natural gas versus gasoline and discussed pro-solar energy stance). My December 10 post discussed the importance of jobs, under Point #4. Clearly the President’s economic team has advised him of the importance of jobs, and this announcement is not a surprise to me, as we also have the QE reduction in effect, and the FOMC meeting which concludes tomorrow, Wednesday. So a few economic policy items are in motion and magically on the first State of the Union address of 2014, we hear about jobs. No, I am not going to claim that I predicted this announcement regarding the importance of jobs, but you heard it discussed on The Fed Trader before our President mentioned it…
Moving forward, lets take a look at a snapshot of tonight’s intra-day SP 500 futures approximately ten minutes before the President began speaking. As you can see, they ticked upward leading up to the speech:
Now, lets take a look at the same chart, at the end of the President’s speech:
What is clear is that the SP 500 futures went upward, an apparent positive response to the President’s speech. Evening futures typically act as a preview to the upcoming daytime market trading’s behavior.
Summary: Today’s stock markets traded up, and could have traded higher had they not been dragged down by AAPL. State of Union address discussed many things but jobs appeared to be hot topic. SP 500 futures, trading during evening, displayed positive reaction to the President’s speech. Evening Asian markets are positive. “Next goal” for SP 500 is close above 1806.
My TSP Allocation remains 50% S-Fund and 50% C-Fund.
– Bill Pritchard
