Stocks Closed Lower On Friday, But Up For The Week

Plus 5 New Strong Buys for Today Stocks Closed Lower On Friday, But Up For The Week [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Closed Lower On Friday, But Up For The Week [Stocks Closed Lower On Friday, But Up For The Week]Image: Bigstock Stocks closed lower on Friday, but managed to close higher for the week. Since the week's gains came in the front part of the week, and the backpedaling came in the back, it didn't feel so exciting by the time the week ended. But, for the week, the Dow was up 1.99%, the S&P was up 1.51%, the Nasdaq was up 0.73%, and the small-cap Russell 2000 was up 2.25%. And the follow-through day count is still alive. You heard me talking about follow-through days last week. After a sharp rally (1.25% or more) off the lows, traders want to see follow-through buying. Follow-through days are looked at as a signal that a new uptrend could be starting. The strongest follow-through days (a rally of 1% or more on increased volume), usually come between days 4 and 7. The count got started last Monday when the S&P was up 2.59% (day 1). On Tuesday (day 2), it was up 3.06%. It was down modestly on Wednesday (day 3). Was down again on Thursday (day 4). And on Friday, we saw an even larger decline (day 5). But, all that's required for the follow-through day count to remain intact, is to not take out day 1's lows. And so far we haven't. Today (Monday) is day 6. And Tuesday is day 7. Ideally, it would be great to get our follow-through day between today and tomorrow. Although, follow-through days can come after that. But, again, the best ones are usually on days 4-7. We shall see. Friday's Employment Situation report came in better than expected with 263,000 new jobs created in September (288K in the private sector and -25K in the public), vs. the consensus for 250,000 (280K private and -30K public). The unemployment rate also beat expectations at 3.5% vs. last month's 3.7% and views for the same. The participation rate slipped from 62.4% to 62.3%. And average hourly earnings were up 0.3% m/m, same as last month and matching estimates, but dipped to 5.0% y/y from last month's 5.2% and views for 5.1%. The industries with the biggest job gains were: Leisure & Hospitality with 83,000 new jobs; Health Care with 60,000; Professional & Business Services gained 46,000; Manufacturing was up 22,000; Construction rose 19,000; and Wholesale Trade added 11,000. Even though job gains were down from last month's 315K, a print of 263K was another strong report. But, on Friday at least, the market interpreted that as a potential negative. Because with jobs still hot, it suggests that the large increase in rates so far has not had much of an impact on slowing down the economy (and thus inflation), and the Fed will need to keep raising rates until it does. We all knew the Fed wasn't done yet. But the continued strength in the jobs market could suggest they may have to stay at it even longer than expected. With the employment report out of the way, traders will now turn their attention to the Consumer Price Index (CPI) report on Thursday, 10/13, for the latest indication on what the inflation picture looks like. In the meantime, everyone will be watching to see if Monday's lows can hold. If so, and we can get a nice rally going this week, it's possible we may be able to turn the corner on the market. And given that Q4 is typically the best quarter of the year for stocks, especially in midterm years, this would be the perfect time to see that happen. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [Ready to invest in this private tech company reshaping the cloud?]( NanoVMs has a new server operating system based on unikernel technology and is currently open to investment from the general public. 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