EB Daily Market Report - Friday, May 5, 2023

Dear Members.

A brief update today as Tom Bowley is enjoying a well deserved day off.

A very strong jobs report this morning with traders cheering the good news instead of worrying about further rate cuts with all of the major indexes substantially higher and the NASDAQ leading the charge on the coattails of Apple's strong earnings. We're also seeing much needed relief in the regional banking sector, soothing the nerves of investors who have been worried about even further bank failures. In fact, the VIX that had shot up back above 21 yesterday, has now fallen back into the 17's as trader's cheer the developments of today.

While we should look at today's performance as very positive there's still work to be done. With AAPL's earnings now out of the way we've heard from the most important companies yet the S&P is struggling to make a serious breakout. Instead, we continue to hover in the 4100 range and until that changes - one way or the other - we're likely to remain in a consolidation stage. That's not necessarily bad but it could be trickier to see big gains without news that might convince more traders to put more money to work. From my perspective, the S&P needs to clear 4200 for the bulls to take control of the momentum. To the downside we'll want to see the 50 day moving average, currently at 4041, hold on any selling. In the meantime, we're seeing that it is very difficult for the bears to make much headway which should also be seen as a positive.

Tom will be back Monday with his regular Daily Market Report. Have a great weekend!

At your service,

John Hopkins