Weekly initial jobless claims dips below 800,000

The number of Americans applying for initial jobless claims registered a decrease last week, falling below 800,000 for the first time since the COVID-19 pandemic began to hurt jobs market.

According to the Dept. of Labor, 787,000 Americans filed for initial jobless benefits for the week ended Oct. 17, compared to a revised 842,000 the week earlier. The latest week’s figure is also lower than the 895,000 expected by economists polled by FactSet.

Continuing claims, (the number of people filing and those staying on unemployment benefits) was 8.373 million for the week ended Oct. 10, revised downward from 9.397 million the previous week, the Labor Department said.

While the jobs market and real economy is yet to recover from the pandemic-induced losses,  Tickeron's analysis of stock market shows the following:

SPDR® S&P 500 ETF (SPY) 

SPY in upward trend: 10-day moving average broke above 50-day moving average on October 09, 2020

The 10-day Moving Average for SPY crossed bullishly above the 50-day moving average on October 09, 2020. This indicates that the trend has shifted higher and could be considered a buy signal. In 11 of 13 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 85%.

Current price $342.49 is above $332.29 the highest support line found by A.I. Throughout the month of 09/21/20 - 10/21/20, the price experienced a +5% Uptrend, while the week of 10/14/20 - 10/21/20 shows a -1% Downtrend.

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Indicator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.

The Momentum Indicator moved above the 0 level on October 01, 2020. You may want to consider a long position or call options on SPY as a result. In 49 of 71 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 69%.

The Moving Average Convergence Divergence (MACD) for SPY just turned positive on October 01, 2020. Looking at past instances where SPY's MACD turned positive, the stock continued to rise in 35 of 49 cases over the following month. The odds of a continued upward trend are 71%.

SPY moved above its 50-day Moving Average on October 07, 2020 date and that indicates a change from a downward trend to an upward trend.

Following a +2.52% 3-day Advance, the price is estimated to grow further. Considering data from situations where SPY advanced for three days, in 250 of 368 cases, the price rose further within the following month. The odds of a continued upward trend are 68%.

Bearish Trend Analysis

The 10-day RSI Indicator for SPY moved out of overbought territory on September 03, 2020. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 58 similar instances where the indicator moved out of overbought territory. In 27 of the 58 cases, the stock moved lower in the following days. This puts the odds of a move lower at 47%.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where Apple declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 50%.

SPY broke above its upper Bollinger Band on October 12, 2020. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Aroon Indicator for SPY entered a downward trend on October 05, 2020. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.