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We’ve got a pattern going here, and it’s been driving me nuts for weeks.
Every Friday lately, the market finds a reason to sell off.
Sometimes it’s gentle, sometimes it’s ugly, but the consistency is unmistakable — they’ve been trying to sell things off on Fridays for the most part.
Traders don’t want to hold risk into the weekend when headlines can flip everything upside down.
And this Friday, they had an easy excuse. The jobs report looked strong at first glance, but once you dig into it, the quality of those jobs becomes a lot more questionable.
Out of roughly 170,000 jobs created, a large chunk came from government hiring, with another sizable portion coming from healthcare and hospitality.
That doesn’t exactly scream strong economic engine, yet the headline number alone was enough to justify a wave of selling.
Then the price action added fuel to the fire. Right at the open, the S&P 500 (SPY) and Nasdaq 100 (QQQ) were rallying, everything looked stable, and then around 9:45 a.m. ET they flipped the switch and dumped it.
That kind of rug pull sets the tone for the rest of the day.
The Numbers Don’t Lie
The S&P 500 index (SPX) opened the week at 7595 and dropped to 7383 by Friday afternoon — down 212 points from the weekly open. The Nasdaq 100 (NDX) fell from 30,415 to around 29,195, and the Russell 2000 (RUT) dropped nearly 100 points from 2920 to 2831.
The Dow Jones Industrial Average (DJI), though, held up relatively well. It barely moved from 51,128 to close at around 50,866. That outperformance deserves an explanation.
The index is price weighted, not market cap weighted, so high-priced industrial names like Caterpillar and Goldman Sachs carry outsized influence.
Those industrial names have been strong, helping the Dow stay afloat while tech drags down the rest.
There’s also been a clear rotation into defensive names — Coca-Cola (KO) popping back up, utilities catching bids and even some retail getting attention — while most of the growth-heavy areas took a beating.
Under the surface, breadth has been weak, with most SPX components sitting at or below their 200-day moving average while a few heavy hitters keep the index elevated.
Sentiment hasn’t been much healthier.
The put-call ratio has been sitting at unusually low levels, and when everyone piles into calls, that’s usually a warning sign rather than a bullish one.
Same Pattern, Different Week?
We’ve seen this movie before. Friday sell-off, then the next week they rally the thing right back up.
So the question is whether this was another one of those setups or the start of something deeper.
I’m not eager to load up heading into a weekend. If anything, grabbing a small amount of SPY puts as insurance isn’t the worst idea when headline risk tends to spike on Saturdays and Sundays.
For now, the smart play is patience. There are key support levels roughly every 10 points on SPX, and I want to see how price behaves around those before stepping in.
No sense trying to catch a falling knife when next week can give much clearer signals.
Geof Smith
Geof Smith TradingÂ
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P.S. Wall Street’s Dirtiest Secret Yet…
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Disclaimer: The trades expressed today are based on signals from the Sleeper Cell Scanner with the benefit of 20/20 hindsight unless otherwise stated. According to a backtest of 64 years of data dating back to 1962, the signals pulled by the scanner would have been 81.9% accurate on over 7,300 trade signals… No strategy is perfect, and wins are not guaranteed. There are bound to be winners and losers along the way. Since the Sleeper Cell Scanner is a tool for traders and not a trading service, profits and performance will vary among users.
