Good day! Friday was another slow day in the market due to the holiday weekend, but even with the lighter volume the indices managed more significant intraday activity as compared to the prior two days. The early morning economic data played a large role in the move, as did the consolidation of the prior two days which created a coil that sprung loose with the news (although it remained muted, in part due to fewer players). The overall theme of the data releases was a slowing economy, favoring a continued hold on Fed lending rate increases.

The jobs data displayed a moderated growth in the month of August. U.S. nonfarm payrolls grew by 128,000, in line with expectations, while the unemployment rate declined to 4.7%, off 0.1% from the month before. Average hourly earnings rose to $16.79, a 2 cent (0.1%) increase, which fell short of the 0.3% increase that was anticipated, but offset slightly by a upward revision of 0.1% for July.

Shortly following the open, the University of Michigan's consumer sentiment was released, rising from August's earlier reading of 78.7 to 82. This was greater than anticipated, but remained lower than July's 84.7. Inflation expectations rose to 3.8% from 3.2% in the upcoming year.

At 10:00 ET the Institute for Supply Management released its data on factory activity and July's construction spending data also came out. The ISM reported steady factory activity, down 0.2% from July's 54.7%. This was less than expected but remains over the 50 mark which indicated expansion. Bad news for me is that the housing market is continuing to slow... darn it! Not unexpected though... Spending fell by 1.2%, most notably brought asunder by residential construction. Residential spending fell 2.0%, with pending home sales down 7% in July.

Friday began with a strong upside gap coming out of the jobs data. The Nasdaq experienced the strongest move into the open and was hence more extended at the beginning of the day. Not much took place until the 10:00 ET data, which then kicked off a strong, but short-lived move to the downside. This took the market well into the gap zone before the momentum began to turn back around out of the 10:45 ET reversal period in order to once again favor the bulls.

A nice pop back into the morning highs in the S&P 500 and a rapid reversal in the Nasdaq Composite and Dow Jones Ind. Ave. was followed by a small triangle for the remainder of the morning. Light volume, and a slower pullback off highs in the last segment of the triangle created a solid, high probability buy setup intraday into noon. This breakout continued to lead the market higher over the next hour.

Both the Nasdaq and S&Ps experienced slowing upside into 13:00 ET. This created the circumstances favorable for a correction out of that reversal period. All three indices held those early afternoon highs. The Nasdaq, aided by its relative weakness, saw the greatest retracement off the intraday highs. By this time volume had once again declined and failed to gain momentum ahead of the close.

At the moment there is a bias for upside to continue into fall, but the pace over the past week will leave the indices open for a pullback to flush out buyers before it can be allowed to continue.  The market broke the prior week's range, but failed to do so with volume, and hence conviction. This leaves it susceptible for a move back into the lower end of that range. The Nasdaq is likely to continue to have the most difficult time. One thing to also remember is that this is also going to be a shortened trading week since the market is closed on Monday.

Economic Reports and Events
Sept. 4: Market closed for Labor Day holiday
Sept. 5: -
Sept. 6: Productivity-Rev. for Q2 (8:30 am), ISM Services for Aug. (10:00 am), Crude Inventories 9/1 (10:30 am), Fed's Beige Book (2:00 pm)
Sept. 7: Initial Claims 9/2 (8:20 am), Wholesale Inventories for July (10:00 am)
Sept. 8: Consumer Credit for July (3:00 pm)

Earnings Announcements of Interest
Only stocks with an average daily volume of 500K+ are listed. List may not be complete so be sure to always check your stock's earnings date before holding a position overnight.
Sept. 4: -
Sept. 5: MBT
Sept. 6: AZPN, HOV, MATK
Sept. 7: FCEL, JOSB, NSM, SHFL, COO, UTIW
Sept. 8: -
Note: All economic numbers and earnings reports are in lines with those compiled by Yahoo Finance. Occasionally changes will occur that are made after the posting of this column.