We have been stuck in the same trading range since December. So yes, stocks were up Thursday, but still well below the top end of the range at 2125. This is just more noise that doesn’t deserve our attention.
Traders use the term “noise” for any price movement that has no real significance. In particular, movement that does not denote a clear trend and thus of no benefit to your trading decisions.
There has been quite a bit of noise in this trading range and it will stay that way until a new catalyst emerges. Maybe that comes today from the Government Employment Situation report.
If another stinker like last month, then down to the 200 day moving average we go. However, if it is robust (250K+ jobs added) it could possibly reawaken people’s belief in the strength of this economy. That could push stocks up to new highs.
More likely it will be something in between those two outcomes with more range bound noise as a result.
aka Steve Reitmeister
Executive Vice President, Zacks Investment Research