Friday saw markets come unglued as the non-farm payroll numbers also showed rising wages which is considered an indicator of rising inflation which leads to central banks raising interest rates. While analysts in general feel interest rates up to 3.5% won’t harm stocks, investors were facing a deeply overbought market which exacerbated the sell-off.
Friday sell-offs tend to be brutal as many times buyers are heading out for the start of the weekend. When stocks start to fall precipitously buyers determine that it is best to stay away and let stocks fall where “they may”. This is why drops on Friday are normally not followed by a recovery Monday as buyers stay low with their offers and worries investors who failed to get out on Friday, bail on the Monday. That means we will probably see more selling on Monday or at the least, a bounce that will not hold.
Here is the Market Breadth Indicator outlook for Monday Feb 5 18.
Members should review the Market Breadth Indicator as there were significant changes in the market breadth indicators on Friday following the large plunge in the indexes.
The market breadth indicator analysis and outlook is for FullyInformed Members.
Advance Decline Numbers Outlook For Mon Feb 5 2018
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