EB Daily Market Report - Brief Update - Thursday, February 6, 2025

Strength in our major indices seems to be cooling as we approach all-time highs and Friday's January nonfarm payrolls. December nonfarm payrolls came in at 256,000, well ahead of consensus estimates. Tomorrow, nonfarm payrolls are expected to come in at 168,000 with estimates ranging anywhere from 125,000 to 225,000. Manufacturing payrolls were reported down 13,000 last month, a big surprise. Tomorrow morning, we'll be looking for that number to turn slightly positive again, at 5,000.

Here are the major indices and their respective key levels of short-term price support:

Dow Jones:

The AD line has come storming back, along with price, so a breakout above 45000 would be meaningful.

S&P 500:

6121 is the all-time candle body high, while 6118 represents the highest close on record.

NASDAQ 100:

Gap resistance from the DeepSeek news last week is at 21774 and the all-time high close is at 22097. Those are the two key numbers to watch. I believe the AD lines are telling us a very bullish long-term story for U.S. stocks, it's only the short-term that I remain a bit nervous/cautious.

Russell 2000 (IWM):

One of IWM's biggest issues in 2024 was the faltering AD line. That has strengthened in 2025 thus far, but it still has a long way to go. From a price perspective, the 230 level has been difficult to pierce of late. The IWM opened slightly above 230 this morning, but as of this writing, it's once again backed off that resistance and it's back in the 225-230 consolidation range.

Perhaps the January nonfarm payrolls report will be the catalyst to drive our major indices through key resistance, but if it's not, we'll be running out of key earnings reports over the next week to ten days to act as a catalyst.

Let's see what tomorrow morning brings and go from there.

Happy trading!

Tom