Gareth Soloway argues the stronger-than-expected jobs report is being read too positively by the market, but he still sees the rally as a technical trap because major index resistance levels remain intact and he expects downside to reassert later.
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Gareth Soloway opens by introducing himself as chief market strategist at verifiedinvesting.com and says he is focused on technical analysis over narratives. The main macro event is the delayed non-farm payrolls report, which he says came in better than expected across almost every line item: payrolls, private payrolls, unemployment rate, participation rate, U6, and average hourly earnings. He notes the market had leaned bearish into the release because of prior administration commentary suggesting a weak number, which had helped push 10-year yields lower yesterday. Instead, the report surprised to the upside, yields spiked back toward 4.2%, and equities rallied. He emphasizes, however, that the rally does not change his chart view. …
Near term, the post-jobs-report pop is tradable but fragile: if the S&P, Nasdaq, and Dow fail to reclaim the cited resistance zones, the bounce can reverse quickly. The most actionable immediate long is crude oil if it breaks 66.50; the main risk is chasing equities into overhead supply.
Over the next several weeks, the market likely needs a convincing breakout through the major index ceilings to shift the tape from corrective rally to durable uptrend. If that does not happen, Soloway expects the stronger-economy narrative to give way to renewed selling, especially if consumer-spending weakness and negative earnings reactions keep broadening.
Structurally, he is arguing that this remains a technically bearish regime despite occasional strong data, with leadership concentrated in a few areas and the broader market vulnerable below key trend levels. He also implies a longer-lasting split in the real economy between affluent spending and weakening middle-income demand.
The non-farm payrolls report came in better than expected across the board.
He explicitly says payrolls, private payrolls, unemployment, participation, U6, and earnings all beat expectations.
The market is rallying because the jobs report was strong, not weak as some had expected.
He links the upside move in equities and yields to the stronger-than-expected data and the prior bearish setup.
The S&P rally does not change the broader bearish setup because major resistance remains overhead.
He repeatedly says the S&P is still below the key resistance zone and the downside bias remains unless broken.
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