Non Farm Payroll S&P 500 Analysis

• Posted by Greg Harmon
• on November 6th, 2015

It is the date of the non-farm payrolls report for October today and the guess what? The stock markets finds itself at a crossroads again. After the nasty volatile chop of the August to October period things are back where they started. But that does not mean strength necessarily. Remember before the 10% sell off and the ceremonial beard cuttings there was 8 months or more of sideways price movement.

Will the non-farm payroll report be the catalyst to move the markets higher? It could be. The Fed Governors have been getting chatty again and told us that December is a ‘Live’ meeting. I am not sure what that means. I though they were all live meetings. Will Janet be periscoping the vote?

Whatever happens with the report today there will no doubt be lots of words spent on the interpretation and how the Fed will react. We humans cannot help ourselves. Let me give you my version of it right now.

Above is the long term chart of the S&P 500 I have been following for 5 years. It shows the long term uptrend that has been in place since the March 2009 bottom and the major break out over 13 year resistance in 2013. It also shows the Elliott Wave count. Within that wave count the crossroads is visualized as the current position in Wave (IV).

Has Wave (IV) completed and Wave (V) ready to start? Or is this just the (b) top in Wave (IV) with another leg lower to (c) to complete it first. One suggests that you should be building your buy list now. The other that you can enjoy the holiday season first and then start your work.

Either outcome gives a long term view higher. And the other indicators on the chart support that. The momentum indicators are holding bullish. The MACD has reset lower and is now leveling. The RSI held at the mid line and then turned back higher. All of the Moving Averages are rising. And the worst one, the Bollinger Bands®, show a tightening with a rising lower bad and flat upper band. Maybe this is the one to watch as tight Bollinger Bands often precede a big move.

Did you notice that there was no estimate of the non-farm payroll number or employment rate or average hourly earnings? I do not care what they are. You know who else does not care? The Farm workers above harvesting during the release of the report. Enjoy your day and some fresh vegetables.

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