Jobs, jobs, jobs!
That’s what it’s all about, or not about today. Last week we got much better than expected numbers as Job losses fell from 640,000 to 565,000 but how much of that was due to the July 4th holiday weekend we will see this morning. Analysts have quickly lowered their expectations to match last week’s figure (as they don’t have a clue of their own) and now we are expected to lose “only” 550,000 jobs this morning – still a 6.6M annual pace so keep that in mind should the markets decide to “celebrate” that number. Looking at the chart, you’ll see that July of ‘08 had a sharp downturn in Job losses as well, down from 400,000 to 350,000 with July 4th celebrated on a Friday last year too. Those reports arrested a slide in the Dow from 13,000 in May to 11,000 in mid-July and the market ran back to 11,800 on Aug 11th and we held around 11,500 until things fell apart in September and we fell all the way to 8,000. I know – history is just soooooo boring, what could possibly be learned from it?
Yesterday was an amazing day as we ran right up to the target levels I predicted on Monday, which I reiterated in yesterday’s morning post, saying: “Ourupper targetsto break thedreaded head and shoulders pattern are: Dow 8,500, S&P 930, Nasdaq 1,825, NYSE 6,000 and Russell 510.” We had what we call a “Free Money Day” as the markets went up and up and up some more with the Dow topping out way up at 8,620, a 6.4% move off the bottom, which is just about a 20% retrace of the 33% drop so, of course, we shorted it! The S&P made it right to 932 and finished there, up 7.1% since Friday. The Nasdaq made it all the way to 1,860 after gapping just over our target at the open, up 6.9% for the week. The NYSE hit 6,000 on the nose and finished just under it – up 7.1% while the Russell over-achieved to 515, up 8.4% in 3 days.
As I mentioned yesterday, just because we made our targets, we are not automatically expecting a “breakout.” We are not happy with the WAY in which we got here – a short rally on fairly low volume leaves what I call an “air pocket” below the gains as there is little support.…
