Jobs data didn’t change much – are stocks forming a short-term bottom?
Stocks extended their decline on Thursday as sentiment turned lower despite Wednesday’s S&P 500 rebound. Today, the index is expected to open 0.1% higher after a slightly weaker-than-expected Nonfarm Payrolls report, which came in at +151,000 vs. expectations of +159,000.
Investor sentiment remains weak, as shown in Wednesday’s AAII Investor Sentiment Survey, which reported that only 19.3% of individual investors are bullish, while 57.1% of them are bearish.
The S&P 500 failed to extend Wednesday’s rebound yesterday, as we can see on the daily chart.
Nasdaq 100: Briefly Below 20,000
The Nasdaq 100 closed 2.79% lower on Thursday, briefly dipping below the 20,000 level. Key support remains around 20,000, while resistance is at 20,500–20,600. Today, the Nasdaq 100 is expected to open 0.3% higher following the jobs data.
VIX Remains Elevated
The VIX index, a measure of market volatility, remained near Tuesday’s local high, confirming heightened fear in the market.
Historically, a dropping VIX indicates less fear in the market, and rising VIX accompanies stock market downturns. However, the lower the VIX, the higher the probability of the market’s downward reversal. Conversely, the higher the VIX, the higher the probability of the market’s upward reversal.
S&P 500 Futures Contract: Sideways After Jobs Data
This morning, the S&P 500 futures contract is trading sideways following jobs data that didn’t surprise the market. Key resistance is now around 5,800, while potential support is at 5,700. The contract remains below its downward trendline.
Conclusion
Stocks are likely to open slightly higher today, but volatility may continue following recent declines. After failing to extend a rebound on Wednesday, the market fell to new lows yesterday.
Is the market headed much lower? Given rising geopolitical uncertainty and worsening investor sentiment, no clear positive signals are evident. It seems the bull market may be due for a longer pause.
Quoting my Stock Price Forecast for March 2025 “the stock market is poised for a positive start to the month, though this may simply be another part of its medium-term consolidation. The S&P 500 keeps fluctuating following its post-election rally.”
For now, my short-term outlook is neutral.
Here’s the breakdown:
- The S&P 500 extended its downtrend again, but a short-term bottom may be forming.
- The stock market is still seeing increased volatility following the post-election rally.
- In my opinion, the short-term outlook is neutral.
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Paul Rejczak,
Stock Trading Strategist