Jobs Report Looms

To our way of thinking, Thursday’s market was very weak.  With trading up in the morning on a perfectly reasonable rally day, the market decided not to rally but instead pulled back.  The market has been making signs that it wants to go down and you have read about some of those signs in these posts recently.  The primary sign was the Dow being strong while the broader indexes did not participate very well.  

Last Friday the Dow put in a fairly good high as a point of reference.  We chose to look at the NASDAQ Comp in yesterday’s post and we refer to it again here tonight.  As we said, the Comp had dropped about 75 points and the natural retracement level would be based on Fibonacci numbers that indicated between 28 and 46 points.  Friday’s jobs report could change our thinking on this but Thursday’s market managed to take the Comp up 29 points from Wednesday’s lows and then it hit a wall and fell the rest of the day to close right about at Wednesday’s lows.  We think this means that the best the Comp can do in Friday’s market is to get back to that 2279 number of Thursday.  

We apologize for all of the technical talk the last few days but the message is clear:  stocks want to head down right now.  Today had to scare some of the bulls especially as the market couldn’t bounce off what should be very good support.  The next move could be what they call nonlinear meaning a drop of unnatural proportions.  The market is sitting in a very precarious position after Thursday’s close and needs desperately to have a rally.  We think the buyers are tapped out.

If the jobs report can revive the market for a little while that would be a bad sign in our opinion.  Likewise if the jobs report provides some further selling, that would also be bad because of where the prices are at the close on Thursday.  

We urge you to take a close look at your holdings, where ever and what ever they are to see if they are performing up to your expectations.  If not, this would be an excellent time to consider unloading some of your dead wood.  I see that INTC dropped below 20 today on its way, in our opinion, to single digits.  This stock was touted by the great Jim Cramer and about six weeks afterwards, it has dropped 20%.  This is the type of stock that should be released from your portfolios.  Of course, it should have been dropped when the Jim Cramer hype was all over the place; but that was the time when everyone was buying it, probably from Cramer.

We have been warning you to be careful out there and tonight is no different.  The market has become very treacherous.  We are anxious to see how trading unfolds on Friday.  We could see a rally back to 2279 in the NASDAQ Comp and that would be the time to exit.  Otherwise, the market could just go down from here with no buyers in sight.

Dow Industrials:  10,972.28  -33.46
RYVNX:   19.50  (well, maybe yesterday’s quote was right???)
RYAIX:  22.50
TLT:  88.61
BEGBX:  12.93