The Employment Report revealed big gains in jobs to 292K vs prior 252K. This was substantially higher than many had expected. Holiday spending and unseasonably warm weather were the drivers of most gains. The unemployment rate remained the same but wages fell once again if only slightly.

A summary of the Employment Report is below thanks to Southbay Research:

Stocks initially rallied on the news then fell back understanding that good news here is no doubt “old news” and um, “transitory” to borrow lyrics from the Fed. Markets closed the week Friday with more heavy selling into the close.

China markets like the Shanghai Exchange were able to rally near 3% as State Companies buy shares, the government scrapped circuit breakers and announced further economic easing policies. Naturally this is set against 8-15% declines for January.

Motor vehicle Inventories-to-Sales ratio showed heavy channel stuffing to dealers from manufacturers as the chart below shows:

If that wasn’t bearish enough, Wholesale Inventories released Friday wasn’t favorable either:

Meanwhile the Atlanta Fed went rogue against the Fed’s “everything is great” narrative projecting GDP at only 0.8%.

Even though Donald Trump’s uncouth bluster ruffles many feathers, he seems to have a good feel for the pulse of Americans. Given the sexual and violent attacks in Germany over the past weekend validates much of his rhetoric.  Um, just sayin’.

Market sectors moving higher included: U.S. Treasury Bonds (TLT), Natural Gas (UNG),Coffee (JO), Corn (CORN), Grains (JJG), Energy MLPs (AMLP), Volatility (VIX) and not much else.

Market sectors moving lower included: Everything else.

Below is the heat map from Finviz which displays weakness in red and inverse issues in green.

The top ETF daily market movers by percentage change in volume whether rising or falling is available daily.

Volume is still very high and breadth per the WSJ is also negative on another 10/90 day.

Markets are becoming severely oversold and a rally of some dimension is most likely at hand.

The charts are doing all the talking. I’ll see you all again next week.

Let’s see what happens.