Gap Up Opening a Telling Clue for Friday’s Employment Report
By
Rennie on Thursday, October 7th, 2010 at 2:00 pm
This morning’s open provided an important clue as to the outcome of Friday’s jobs report. The reasoning is that the S&P500 touched a fresh two-month high at the open, a significant development coming one day before the monthly jobs report release. When the S&P500 hits a 40-day high (intraday) just before the Friday employment report, the market has a solid track record of trading flat-to-up on the day of the report. The last 30 occurrences are shown below…
SPX Touches 40-day High Prior to Jobs Report
10/07/10… S&P500 ??? next session
01/07/10… S&P500 +0.3% next session
12/03/09… S&P500 +0.6% next session
08/06/09… S&P500 +1.3% next session
05/07/09… S&P500 +2.4% next session
05/01/08… S&P500 +0.3% next session
05/31/07… S&P500 +0.4% next session
05/03/07… S&P500 +0.2% next session
02/01/07… S&P500 +0.2% next session
12/07/06… S&P500 +0.2% next session
10/05/06… S&P500 -0.3% next session
08/03/06… S&P500 -0.1% next session
01/05/06… S&P500 +0.9% next session
03/03/05… S&P500 +1.0% next session
12/02/04… S&P500 +0.1% next session
11/04/04… S&P500 +0.4% next session
01/08/04… S&P500 -0.9% next session (*)
06/05/03… S&P500 -0.2% next session
08/31/00… S&P500 +0.2% next session
07/01/99… S&P500 +0.8% next session
11/04/98… S&P500 +1.3% next session
07/01/98… S&P500 -0.2% next session
04/02/98… S&P500 +0.2% next session
02/05/98… S&P500 +0.9% next session
12/04/97… S&P500 +1.1% next session
07/31/97… S&P500 -0.8% next session (*)
07/02/97… S&P500 +1.4% next session
02/01/96… S&P500 -0.4% next session
07/06/95… S&P500 +0.4% next session
06/01/95… S&P500 -0.2% next session
05/04/95… S&P500 -0.1% next session
On only two occasions out of thirty, or 7% of the time, did the S&P500 close down 0.5% or more on the day of the release (and it never closed down more than 1%). That’s significantly below the 29% random chance for a 0.5%+ drop one day later, indicating a 40-day high for the SPX just prior to the jobs report is a good indication of limited downside potential on the day of the report.
Gap Up Opening a Telling Clue for Friday’s Employment Report
By Rennie on Thursday, October 7th, 2010 at 2:00 pmThis morning’s open provided an important clue as to the outcome of Friday’s jobs report. The reasoning is that the S&P500 touched a fresh two-month high at the open, a significant development coming one day before the monthly jobs report release. When the S&P500 hits a 40-day high (intraday) just before the Friday employment report, the market has a solid track record of trading flat-to-up on the day of the report. The last 30 occurrences are shown below…
SPX Touches 40-day High Prior to Jobs Report
10/07/10… S&P500 ??? next session
01/07/10… S&P500 +0.3% next session
12/03/09… S&P500 +0.6% next session
08/06/09… S&P500 +1.3% next session
05/07/09… S&P500 +2.4% next session
05/01/08… S&P500 +0.3% next session
05/31/07… S&P500 +0.4% next session
05/03/07… S&P500 +0.2% next session
02/01/07… S&P500 +0.2% next session
12/07/06… S&P500 +0.2% next session
10/05/06… S&P500 -0.3% next session
08/03/06… S&P500 -0.1% next session
01/05/06… S&P500 +0.9% next session
03/03/05… S&P500 +1.0% next session
12/02/04… S&P500 +0.1% next session
11/04/04… S&P500 +0.4% next session
01/08/04… S&P500 -0.9% next session (*)
06/05/03… S&P500 -0.2% next session
08/31/00… S&P500 +0.2% next session
07/01/99… S&P500 +0.8% next session
11/04/98… S&P500 +1.3% next session
07/01/98… S&P500 -0.2% next session
04/02/98… S&P500 +0.2% next session
02/05/98… S&P500 +0.9% next session
12/04/97… S&P500 +1.1% next session
07/31/97… S&P500 -0.8% next session (*)
07/02/97… S&P500 +1.4% next session
02/01/96… S&P500 -0.4% next session
07/06/95… S&P500 +0.4% next session
06/01/95… S&P500 -0.2% next session
05/04/95… S&P500 -0.1% next session
On only two occasions out of thirty, or 7% of the time, did the S&P500 close down 0.5% or more on the day of the release (and it never closed down more than 1%). That’s significantly below the 29% random chance for a 0.5%+ drop one day later, indicating a 40-day high for the SPX just prior to the jobs report is a good indication of limited downside potential on the day of the report.