The roller coaster ride continued on a wild Friday after a disappointing jobs report.
The broad market saw the sharpest reversal in four years on Friday, turning major opening losses into sizable gains by the end of the session, as investors shrugged off a surprisingly weak jobs report.
The number of new jobs created in September slowed sharply for the second straight month. The economy added a seasonally adjusted 142,000 jobs in September, following an even smaller gain in the prior month, the Labor Department reported Friday. This was well under the expected gain of 200,000 jobs.
The unemployment rate was unchanged at 5.1%, though more people dropped out of the labor force. The percentage of Americans in the labor force fell to the lowest level since October 1977.
The disappointing back-to-back employment reports suggests the labor market cooled off at the end of summer, putting in doubt whether the Fed will raise interest rates before the end of the year.
Despite the poor report, the market managed to claw its way back into positive territory by early afternoon.
The rally Friday afternoon helped the main indexes end a volatile week on a positive note. SPX closed up 27.54 points, or 1.4%, higher at 1,951.36 and recorded a 1% gain over the week.
SPX 6 month chart:
VIX 6 month chart:
The VIX closed Friday at 20.94, down 1.61 points or 7.14%. The "fear" index is now back at the historical average of 20.
If the market is within reason and we can still get the minimum credit for acceptable strikes, we are planning to enter an SPX weekly Iron Condor Monday for the October 2 cycle. Trade recommendation will be posted Monday if all is "a go".
We will continue to trade the plan and keep tight reigns on our risk management. Please don't hesitate to email me if there are any specific questions on the results or the trades. The guidelines for the Couch Potato Trader plays were most recently published on August 20, 2015, and can be found at this link:
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Next week's economic news is summarized below:
10:00 am ISM Non Manufacturing Index
8:30 am International Trade
10:30 am EIA Petroleum Status Report
8:30 am Jobless Claims
2:00 pm FOMC Minutes
8:30 am Import/Export Prices
Trade updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully,