Last Friday the Bureau of Labor Statistics released its non-farm payroll report for December. The result of 223,000 new jobs was slightly higher than expected, but was balanced by a downward revision of 28,000 for the previous two months.
Buried in the payroll stats were figures on hours worked, hourly earnings and weekly earnings. A decline in average weekly hours worked (to 34.3), combined with a modest increase in average hourly earnings (nine cents) resulted in a mild decline in average weekly earnings from November to December (highlighted).
Source: Bureau of Labor Statistics
As a result, stocks rocketed higher on Friday. The S&P 500 gained 2.3% and the Nasdaq Composite rallied 2.6%.
Despite Friday's bullish flash, the market is still in bear mode. The S&P 500 remains beneath a bearish trend line (black dotted line), currently located at about 4,025, and below its descending 200-day moving average (red), currently positioned at 3,993.
Chart Source: TradeStation
Apple is a drag
Overcoming those two obstacles may be difficult, especially with key stock Apple (AAPL) getting dogpiled by analysts. Apple received a downgrade from outperform to neutral from Exane BNP Paribas on Jan. 3. The French bank lowered its price target to $140 from $180.
Then on Monday, Apple saw its price target lowered to $125 from $170 by Bernstein, which maintained its outperform rating on the stock.
On the weekly chart, Apple's bearish double top pattern remains clearly visible. The stock's volume has been low since late November (shaded yellow), an indication that investors are awaiting a catalyst. Apple's earnings are scheduled to be released after the close on Feb. 2.
Chart Source: TradeStation
Lululemon's Scary Chart
Lululemon Athletica (LULU) was rocked for a 9.3% loss on Monday after the maker of athleisure wear lowered its fourth quarter guidance for gross margins.
The thing that really should concern investors is the stock's chart, which shows a massive head-and- shoulders formation (L-H-R). The bearish pattern began forming in mid-2020.
Chart Source: TradeStation
Hope for Alibaba
Alibaba Group Holding (BABA) is coming off a rough couple years and is down by half since the start of 2021. However, on Monday, the stock jumped 2.89% on news that founder Jack Ma was giving up control of Ant Group, an affiliate of Alibaba.
Over the past six months, the stock has formed a rounded bottom. Also, Alibaba is trading above its 50-day moving average (blue) for the first time in nearly a year.
Chart Source: TradeStation
In addition to the news about Ma, the stock is also a beneficiary of China's reopening. Alibaba's bullish pattern suggests the stock could run to $140.
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