Slower job growth The Dow was unable to hold over the break out level on its 3rd attempt and the S&P 500 did not even make it back up to test its high of the year so it was evident that the market was weakening. Earlier this week we saw that the CPMI number continued to weaken for the second month and US factory orders fell as the ISM - non-manufacturing survey came in lower. Then on Friday we found that the job growth is also slower and that seemed to help the Friday sell off. It may have been an added excuse as is often the case once s decline begins as it is not all about the numbers. As when APPL reported great earnings yet the stock could not even make it to a recent high. It is just that once some shift into a selling mode they can keep it up for sometime unless there is some dramatic reason to change or until they simply sell what they want to sell. The market decline is not yet severe and thought it is likely to go lower, we may just be setting up for a better buying point closer to the end of the month.

Before we get to today's charts some  entertainment.  

Jessica Sanchez and Joshua Ledet - For the first 7 years of American Idol I did not see the program. I had watched part of one early show and the singers it seemed were not very good so I never returned to see more. By year 8 when 7 contestants were left I happened to watch and was very impressed with the talent. When a singer named Adam Lambert sang he seemed like a shill, a plant of a professional with the other amateurs. Actually it was a combination of talent on top of the months of excellent coaching, rehearsals, a fantastic musical director and band and just plain practice. In Russia all the top bands are on television for live shows every Sunday but the USA does not have such a program though in the past American Bandstand and Ed Sullivan did present some artists. I found though that the last 5-6 shows of American Idol each year can be a treat to watch and the last two or three can have some of the biggest names making guest performances. The talent gets better each year and often the contestants are better than the  known singers. I think the contest ends this month and here are two of the best finalists singing a song together. Jessica Sanchez is 16-years old and Joshua Ledet is 20. Really amazing talent and performance skills here as they sing "I Knew You Were Waiting (For Me)" by Aretha Franklin and George Michael. Send them a tweet of encouragement at   @jsanchezai11  @JLedetAI11

The U.S. economy added 115,000 jobs in April, according to a report released by the Labor Department. Economists had expected non-farm payrolls to increase by 165,000. Meanwhile, the previous month’s job gains were upwardly revised to 154,000 from the 120,000 reported earlier. The February job additions were also revised to 259,000 from 240,000.

The unemployment rate based on the household survey ticked down 0.1 points to 8.1 percent. The labor force participation rate declined to 63.6 percent, while the employment population rate was little changed at 58.4 percent. The average hourly earnings for all employees rose by 1 cent to $23.38, while on a year-over-year basis, average hourly earnings rose by 1.8 percent.

New claims for unemployment in the U.S. fell by a larger number than predicted in the final full week of April, according to figures released by the Labor Department. For the week ending April 28 initial unemployment claims came in at a seasonally adjusted level of 365,000, a drop of 27,000 from the previous week's revised figure of 392,000. And while the previous week's level of new claims was revised up from the 388,000 initially reported, the drop for the week of April 28 was larger than predicted by most economists who had expected to see new claims come in at 378,000.

The Chicago Purchasing Managers reported the April Chicago Business Barometer decreased for a second consecutive month. After five months above 60, the Chicago Business Barometer fell to 56.2, a 29 month low.

The Commerce Department said Wednesday that orders for factory goods fell 1.5 percent. That was the steepest decline since March 2009, when the economy was mired in recession. Orders rose 1.1 percent in February. A key reason for the drop was aircraft orders plummeted nearly 50 percent. Those orders can fluctuate sharply from month to month. Excluding transportation goods, orders were unchanged. Demand for less durable items, such as food, chemicals and gasoline, rose 0.5 percent.

The U.S. non-manufacturing sector expanded at a slower pace than expected in April, The ISM's non-manufacturing purchasing managers' index came in at 53.5 last month, down from 56.0 in March.

U.S. personal incomes grew slightly more than expected in March but growth in consumer spending slowed somewhat, according to figures released by the Commerce Department. U.S. personal incomes rose by 0.4 percent in March, slightly higher than the 0.3 percent growth posted for February. The growth came in slightly higher than the 0.3 percent growth predicted by most economists. Furthermore, the February personal income figures were revised up from the 0.2 percent growth rate initially reported. Consumer spending, while still up for the month, did not keep pace with rising incomes, growing 0.3 percent.

The latest jobs report came out today with the Labor Department reporting that nonfarm payrolls (jobs) increased by 115,000 in April. Today's chart puts the latest data into perspective by comparing job growth to the S&P 500 since 1940. There are a couple points of interest... For one, the stock market has tended to rally following periods of significantly negative job growth. The last time the US economy witnessed significant negative job growth was immediately following the financial crisis. As has often been the case, the stock market followed the negative job growth that followed the financial crisis with a sharp rally. Another point of interest is the trend in peak job growth since World War II. During World War II as well as during its immediate aftermath, job growth peaked only after reaching double-digit levels. From the mid-1950s to mid-1980s, job growth tended to peak in the 5 to 6% range. Since the mid-1980s, however, peak job growth has been on the decline (see red line). It is worth noting that the current level of job growth is very near its 27-year peak job growth downtrend line and that job growth has been on the decline over the past two months.

This past week's  sectors.

This past week's indices  - 

The month has just started and the charts clearly show the pullback underway with the Dow showing it on the first month, the NASDAQ, S&P 500 and Russell 2000 in their second month of decline while oil skipped a month in between and gold now with four month candle declines. Some are far Above Their ctr. Bollinger bands while the Russell, oil and gold are close though still above that support.

On the 60 min. chart in the top frame of the Dow the blue lines are a measured move we showed last week and though it did run higher to go above the top Bollinger band, it did ultimately fail. For the very short term, if this is a small five wave decline, we could be in wave three to expect a bounce at some point and then a drop lower. When the Bollinger bands are going so steeply downward the candles do not pierce them in such a way that gives the traditional bounce. Do note that on the bottom of the chart the RSI for the Dow is quite short term oversold at 27. 

The weekly chart shows lower volume on this decline than in the  previous three weeks and now horizontal support is basically in line with the 20 week moving average at 12,845. 

The longer term chart shows the significance of this level as it is at a long-term trendline going back to October of last year. The 20 day moving average is still 30 points above the 50 day EMA and if that relationship is reversed, it is a bearish sign. For that to happen we would probably see a break of the trendline and a drop towards the lower Bollinger band and test of the April low. 

In the closer view you see the 50 day EMA in blue while the Williams indicator and RSI are still near their 50 line and MACD so far has  not crossed over. 

And the Dow futures chart with a drop this week, but still 350 points above the previous breakout level. 

The 120 min. Dow futures shows some possible near-term and short term bounce point at the parallel channel trendline just below or a possible quick break down to the 61.8% retracement level. Watch the RSI for a turn back up over 30 to help confirm a short-term bounce buy with tight stop. 

The weekly transportation average was down 0.75% but still well within its recent consolidation pattern. 

The utilities daily chart had dropped Wednesday and Thursday then had a small bounce on Friday. 

Quite a bearish weekly candle for the NASDAQ with the expected short term support first at the horizontal breakout line and if broken the parallel channel trendline near the 50 week EMA. 

The 60 min. NASDAQ has gone into short term oversold territory as you will note on all indicators it is close to the April 23 low and at some minor trendline support. 

The NASDAQ 100 futures closed at the low for the week at previous support levels. 

There was a whipsaw in the last move  of the NASDAQ 100 ETF renko chart as the last buy came not from oversold conditions. So now it is back to a sell but just above that horizontal bounce point from the last time. 

And here the Qs 60 min. chart showing that possible support level short term and the current oversold condition on the indicators. 

The moving average of number of new highs for the NASDAQ started to turn lower but not dramatically so as yet. 

As one would expect the volatility index turned up closing at 19. 

Apple on its 60 min. chart did not even make it to test its $620 level after it's earnings reports. So has been pulling back to test the April low. It may hold that level as you note the RSI and Williams indicators are into oversold territory and another day or so may move back over or at least a short-term buy. 

The semiconductor index was down by 4% for the week closing just slightly under the $400 50-day EMA. 

The NYSE on the top is back at its dotted line horizontal support and just above possible trendline support. A break of that could lead to a bit longer term pullback. In the lower half we see the moving averages of the new highs minus new lows also rolling over this week. 

Now 38% of all stocks on the NYSE are trading over their 50 day MA. 

Our S&P 500 bullish percent indicator shifted to sell over a month ago, though on the lower half of the chart we see the price itself move back over the 20 day moving average but has since moved back under confirming the sell. 

We have 2 similar S&P 500 daily charts this first one shows the break below both the 34 and 13 day EMA is and a drop below the middle trendline. The averages themself have not yet crossed but would do so if this breaks the  horizontal support. 

There is the close-up view showing the significance of the 1357 level and below that the 1340. 

A closer view on a 60 min. chart showing that 1340 support  is also the 38.2% Fibonacci retracement level and below that the 50% retracement at 1315. In this timeframe. Once again the Williams and RSI are in oversold territory. 

By Wednesday, the S&P 15 min. chart had given a crossover sell signal and dropped 31 points. 

The S&P 500 futures near the former breakout level and well above the first longer-term Fibonacci retracement levels 

The 120 min. chart at the close on Friday regular session an oversold RSI at 18 and was near a test of the late April low at 1354. 

The spy chart we had previously  shown the possible five wave move up completed which seems to been the case as in the April rally it could not return to that level.  

On the 60 min. chart this is back at that lower parallel channel line and oversold short term on Williams and RSI. 

As the S&P declines of course the ultra short moved up as there was a moving average crossover though earlier at the lower channel there was a Williams and RSI short term buy as they moved over their lower lines. 

S&P 400 mid-cap index also closed just slightly under its trendline, which started in December. There are some supports close and then at 947 with the 200 day EMA at 932. 

When the Russell 2000 rallied on Wednesday it looked like only a 50 day EMA bounce which turned out to be the case with the Thursday and Friday declines. 

Short term on the 60 min. chart it is oversold and the declining trend line would match up with the horizontal support near 785 by Monday. 

And the ETF for Russell 2000 also near to the 52 area and former support. 

The banking sector lead this decline having run into resistance and if you can't break them up, they often break down. It is closed under its 50 day EMA for the first time since last December. 

This very short term ultrashort financials 5 min. chart is on our public page as a quick trade a quick guide to short-term trading the financials. It gave a crossover by on Wednesday running up the rest of the week. 

The 30 year bond prices closed three cents under the top Bollinger band. In the most recent times when  it got this close it poked briefly through and then began a pullback. Do note that the 20 day moving average is now over the 50 day EMA which is bullish longer-term. 

Last week the retail sector broke out with a nice weekly candle but this week a pullback of 1.8% on some disappointing sales growth numbers. 

The London financial times lost the gains it made  two weeks ago, but closed above this three-week pattern though just under the 50 week EMA. It's histogram has been negative for weeks and we have had a MACD crossover. 

The Canadian venture exchange dipped only 1/2% this week and is either basing or ready for one move lower to put RSI back under 30. 

Last week we were encouraged with the Shanghai stock exchange index as it was a consolidation pattern that looked destined to test the 50 week EMA. This week it followed through with bullishness moving up over 2%. 

The Dow Jones world market dipped 2% and if it breaks support look for a possible move to the 20 week moving average at 237. 

Last week the commodity tracking ETF bounced at its 50 week EMA but this week dropped through it and to some horizontal support as well closing down over 4% this is likely to continue at least until oversold stochastics reading. 

Oil dropped below the blue trendline, which started last October and has just above the 38.2% retrace level at $97. Watch for RSI to dip back under 30. 

The bear flag is a very familiar sight for crude oil though we had not seen it since the last one last August. This week however it broke out of one dropping down 5.6% to test the 50 week EMA the volume was heavier than we have seen in some time and if that 50 week is broken - eEventually we could see a test of the 200-week once again at 86. 

The oil futures chart shows the break of its possible bullish flag dropping it under and to this shorter-term 38.2% retrace with the next logical support over 96 and then at the 50% retrace level near 94. 

Natural gas in its second week of rally as is very common when it has these bounces from the trendline. RSI moved from 30 to 39 yet  the Williams as yet to cross over bullishly. There is 20 day resistance at 246 and horizontal at 240. The MACD is close to crossing over and the histogram has gone positive. 

The ultra long  for natural gas BOIL showing its run from initial buy point at about $5.90. Running up to eight dollars its first bounce at the 38.2% and the island created on Friday it is now under this short term up trend line so may have additional consolidation or pullback before the next move. 

Gold showing a very slight bounce still within its two-month trading range. 

We posted this gold futures chart showing it at the trendline support of this triangle and it then had dropped to S1 pivot from Friday as RSI moved over 30 to capture the bounce. 

The ETF for gold just going sideways, is getting closer to its up trend support. 

The GDX 60 min. candlestick chart showing it also still in a descending pattern though with some bounces shown on the lower RSI 

Gold miners however are still out-of-favor as our GDX mechanical trading remains on a sell even with the slight upward movement on Friday 

Silver futures dropped testing its support at 30 and moving slightly back up but it also could easily drop to put RSI back under 30. 

With lack of volatility there is not much movement on the SLV mechanical trading chart in the short term but still so far this year, it has captured about 30% in gains. 

The general commodities ETF chart looked pretty negative though the copper chart, closing down 2.6% is not quite as bearish. However it did fail to stay above on the test of the broken trendline. 

Palladium had bounced in its possible bear flag support and ran over the 20 week moving average and then dropped back this week though on lower volume. 

The euro futures also have been pulling back but still above support as shown. 

With the euro dropping, the dollar has been moving up and this week closed over the 50 day EMA. Once again. 

We had been expecting on the move down that the US dollar would get to the 200 day EMA in red and bounce from there and it did so moving back up to the 50 day EMA in blue. It may break over and go back towards the top Bollinger band or we could also fail here on a market rally as it is  not uncommon to have a 50-day 200-day pinball move. 

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Check the updated Earnings Calendar on all overnight holds.

 

Political content - skip if not interested.   This week President Obama went to Afghanistan on the anniversary of the failed capture of Osama bin Laden. The supposed leader of Al Qaeda he could have provided  a huge amount of important information if interrogated.  The president still refuses to leave that country at least for another 2 years and there are currently 88,000 U.S. troops stationed in Afghanistan. The President said there will continue to be some involvement for 10 year or more. According to ABC news the United States has been at war in Afghanistan for 3,860 days, 1,834 Americans have been killed and 15,786 wounded while 11,864 civilians have been killed. All this has cost the US taxpayers $443 billion and has created a massive homeland security with 230,000 working for this intrusive organization and 30,000 alone hired to listen to US phone calls. Nothing will change unless voters put elect someone who will not get into undeclared wars and will  respect the constitution and the rights of the citizens.      These are some clips of Mitt Romney - it would be a humorous flip-flop tape but unfortunately it is real. Amazing that some people can still vote for him     Be a model of peace and economic reform.   The only logical and honest choice for 2012 to help fix the broken governmental system and stop the reckless wars that all the other candidates want to continue.

This week's economic calendar for the USA.