Will the week ahead be quiet or noisy?

Stocks generally are quiet the week after the monthly jobs report. But all the talk about the Fed and interest rates may still push stocks around.

By Charley Blaine Jun 7, 2013 8:06PM
Arrow Up (© Image Source/Photolibrary)After Wednesday, things were looking bleak for the stock market. The Dow Jones industrials ($INDU) had dropped 293 points in two days. There were worries about the upcoming jobs report, a slackening economy, not to mention rising interest rates.

On Thursday, things looked worse for stocks until shortly after noon E.T. The Standard & Poor's 500 Index ($INX) dropped to its 50-day moving average and then just below 1,600. The index held. A second bounce came at 12:50 p.m., along with a second bounce. Then, stocks rallied seriously for the rest of the day and, thanks to a better-than-expected jobs report, all of Friday.

It was a startling reversal: Between 12:50 p.m. ET Thursday and Friday's close, the Dow jumped more than 400 points. A lousy week ended up producing decent gains.

The force of the rally probably surprised short sellers, who had bet the market was heading lower and were forced to cover their positions. They may get another chance to short the market, maybe even next week.

Stocks don't move much the week after the monthly jobs report comes out. In the 16 months ended in May, the average change for the Dow in the week after a jobs report was 0.68%. It may have a lot to do with there being few economic reports of consequence and, often, not many earnings reports to digest.

But a quiet week without specific things to react against leaves the market vulnerable to a lot of noise, like the constant debate about quantitative easing and when the Federal Reserve will start the process of slowing its bond-buying program and letting interest rates rise.

That could be a big factor for the next week and even beyond. The Fed's rate-making body, the Federal Open Market Committee, meets June 18-19.

So, there's a good chance of some volatility in the week ahead. Which should make short sellers happier.

What's not clear is whether the stock market itself is vulnerable. Here's what I mean; the major averages hit intraday highs on May 22 and have fallen back since: 1.9% for the Dow, 2.6% for the S&P 500 and 1.8% for the Nasdaq.

If the averages peak -- but not at new highs -- and fall back, that will concern technicians. They will see a head-and-shoulder pattern forming, very often a signal of a weakening market.

They also are watching to see if the Hindenburg Omen -- a combination of more than 2.2% of New York Stock Exchange Stocks hitting new highs and 2.2% hitting new lows on the same day -- will force the market down. This happened four times between May 29 and June, reports Tom McClellan, editor of the McClellan Market Report.

That the averages have gained so much this year -- 16.4% for the Dow, 15.2% for the S&P 500 and 14.9% for the Nasdaq -- remains a concern. It just gets harder to move higher. And that's why all those analysts who have seen a correction ahead still believe it's coming.

It just needs a trigger to set it off.

The week ahead, however, doesn't really have the potential for a big trigger.

The biggest may be Monday, when Apple's (AAPL) annual developer conference starts. If Apple doesn't make some major product announcements, the stock could be pressured.

Right now, the biggest announcements are expected to be new operating systems for its Macintosh and mobile product lines.

The shares are up 14.7% since bottoming on April 19 at $385.10, but they are still off 37% from its peak in September.

The most important economic reports of the week are jobless claims and retail sales on Thursday, and the producer price index and consumer confidence from the University of Michigan on Friday.

There are a few earnings reports of note: Lululemon (LULU) and Annie's (BNNY) on Monday afternoon and Smithfield Foods (SFD) on Thursday.

More on Top Stocks
Jun 7, 2013 8:22PM
Yesterday you were lampooning predictions, Charlie. You tell us... Japan's currency is in default now that it's Central Banks printed it into compromise. Our own economy has been dead for a long time now. The BRIC nations don't need us and block the imports that killed us. Not one of the G8 nations is solvent and Europe is so dead that even Germany has no choice but to stop lying about it's condition and consider defaulting. YOU realize that with each defaulted currency, our investments evaporate... that is- no way to reclaim or recover. Only a fool keeps being condescending about the state of things on a sinking ship.  
Jun 7, 2013 8:29PM
Today's BS Run was brought to us by- Phantom Jobs, an ADP miracle. 175,000 jobs created but the actual selected data unemployment report ticked up. Why? Because grass cutters get paychecks but they don't make enough money to impact the economy. Who does? Economists do. It's great work if you can get it... snort Coke, snooze in your office suite, bet in sports pools, ogle the servants- I mean the staff and text often. When the time comes to predict, be nebulous. The Dow isn't worth 1,000 and no American business platform has anything more going for it than some administrators in leased office space. No assets, no tangible existence. When it crashes it crashes, when it's over those folks will have jumped, not wanting to face us for all the damage they know they've caused.
Jun 9, 2013 12:31AM
It's so propped up the Fed can't stop pumping funny money. $85 Billion a month of buying it's own bonds. We will have lost much more than money before this is all over with..
Jun 7, 2013 11:48PM
While all the Talking Heads talk about either the Jobs Report and or the Stock Market Moves, I notices that rates kicked back up after initially falling for a few days. Charlies talks about nothing much to trigger big moves next week, I beg to differ. If rates continue to climb and Japan continues to blow up, that's more than enough to send shock-waves throughout the Stock Markets.
Jun 9, 2013 10:30AM

What if we all could just print up our own money and "issue and buy our own bonds? " (IOUs to ourselves)  It won't work. There's no free ride. Bernanke should be arrested for counterfeiting and negligence. Take him to Singapore for a good long public cane spanking.

Jun 8, 2013 5:04PM
Heard it today... there's a private meeting with Bernanke attending. A hasty exit from QE this week. Try to guess how much of the- markets, metals, futures, real estate and corporate necks are exposed and helpless against a sudden call of credit outstandings to offset shorts? One thing's for sure, Japan is in deep do-do and it's integrated into every single complex financial instrument that will collapse because of it.
Jun 9, 2013 11:35AM
What is funny is watching people argue over who is worse Democrats or Republicans. The picture of George W. Obama sums it up nicely and hilariously.
Jun 8, 2013 11:30PM
Stocks gonna nosedive like malfunctioned airplane in midair flight.
Jun 9, 2013 12:04PM

Fatty Cakes....Is the "only one" to get "thumbs up" when nobody else is thumbing...


You missed a spot, swabby..!!

Jun 9, 2013 8:21PM

The push will be from Ben printing money to fuel a fack market. Bankruptcy is coming for the USA.

Thanks Ben

Jun 8, 2013 6:02PM

Well if we make some numbers first couple of days, a sell or two goes through...

Then add that to a few thou, laying in wait; And we can pick up some better ideas or add to some good ones we own now....Thinking we might will have a 1-2% drop later in the week..??


It's all a game of smoke and mirrors alright...You just have to increase your bets on 2 pr. or Trips.

Jun 8, 2013 3:11PM
Ssssshhhhh, TOG....the commentors here are the force behind the markets, dont you know?
Jun 9, 2013 11:54AM

I knew there was something strange about that Pic...Miss Lilly saw it right away..


What's the problem Senor Fatty, You have nothing profound for a Sunday morning...?

The Padre throw you out of  Mass, for trying to pilfer the collection plate..?

Or did you get in Communion line too many times?

Can't get that good of wine, back under the bridge can you ?


I thought you cleaned your Hotwheels collection, with TP and Q-tips on Sundays?

Then raced them in the afternoon, for the prize of roasted Rat or Wendy's coupons.

Heard you got a new Frigidaire box from FEMA after that last flood...Good job, Brownie.

Jun 9, 2013 12:17AM

Sometimes they glide in safely....

Any one that you can walk away from, is a good one.....Ol' pilot... 

Jun 9, 2013 2:05AM
I think we will be up 100 to 200 points next week then slow crawl to S&P 1680 before you see a correction. Many stocks are still way over their 52-week highs and mutual funds are getting creamed. It is literally a stockpickers market and potential winners are harder to find. I don't see new money pouring in until bonds get hit or we have a correction. Short term very optimistic. Anyone who has bet against President Obama and his MIT-trained team has lost big time. We are all blessed for the gains to date since the abyss but must never forget how we got there. Our world was nearly collapsed by religious fanatics who usurped government office and pretended to be politicians. They fought war after failed war over oil and minerals. If we had fully embraced electric cars again in the 1960s think where we would be now on battery technology, cleaning up the environment and being independent of Arab oil. We will NEVER pump enough oil to be energy independent in North America. We absolutely must renew our energy grid and adopt electric cars. I heard a former GM exec say last week that within 4 years or less we will have a new lithium-based battery that gives 480+ miles of range on a single charge. This more than eliminates the need for a gasoline engine. The best thing is you can have a solar-panel-based recharging station of your own that doesn't depend on the energy grid. Congress has failed us. We absolutely must move forward with mandatory solar panels and solar film for new homes built and maybe adopting carbon fiber support studs for homes instead of wood so Oklahoma homes can withstand hurricane-force winds. Trailers, a huge lobby for Republicans, should be banned nationwide. Check out ELIOMOTORS if you want to see something cool for 2014. God Bless our President. 
Jun 8, 2013 10:57AM

We'll see,we'll see....I'll predict 200-300 gains on the DOW for next week..

Providing 1-2 heavy hitters on the DOW, don't blow up..And the FED doesn't say too much, pro/con.

Jun 9, 2013 12:05PM
Nadal wins the French Open in straight sets, over Ferrer..
Jun 9, 2013 11:00AM

Wonder with the newer printers, that they make today; If one could be purchased and run fast enough printing money, to keep up with inflation....??


Now where's that high percentage cotton rag, paper  we've been saving...?


Clean that deck, swabbies....!!

Jun 8, 2013 9:48AM
Off to the races after that jobs report.
Jun 8, 2013 3:37PM

MIRAGE GUY;You would be thrilled if we had a depression.You would be gloating.Your

first post would be "I told you so, it`s all Obama`s fault".It`s about time you realized

that Obama has turned the economy around.If Obama was 100% white and a Republican

who would be the markets` biggest cheerleader.Admit it.7,000 point increase in the Dow

is not smoke and mirrors.You can`t keep lying to yourself.

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