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Bad Close Before Payrolls



The results for the close on employment Friday were mixed. However, it's worth noting the index traded lower on the day each time. If the market gaps materially in either direction, the first move will likely be a fade. If we gap higher, the analog suggests that Boo's crew will view that as a selling opportunity. Conversely, Snapper will be pounding the table on a material gap lower.

I realize there were only ten occurrences (and smaller samples are less compelling) but there are two observations worth noting: (1) the market rebounded the following week in eight of them and (2) there were two similar patterns in 1994.

Since we've heard numerous comparisons to 1994, it's worth at least a look at the daily chart for both 1994 and 2004. In the chart below I highlighted the days that met the analog criteria with an "A" and also marked the days that corresponded to the first and second rate rise. As always, past performance does not indicate future results.

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