Jobs Report Looms

The stock market reiterated its sell signal on Thursday as the Dow made another relative new high without the participation or confirmation by any other index that we follow.  The momentum indicators did show some life but not enough to confirm this Dow high.  And, Friday brings the jobs report which we think generally marks the end of the month end strength, and we expect no exception to that rule this month.

If you decided to participate in this and chose one of the Rydex funds we follow below, you were able to get a fairly good price for them.  The time to dive into something like this is before the market decides to go down but sometimes the move seems difficult due to the extreme bullishness around you.  Contrarian thinking is frowned upon during these times and this time it is actually laughed at.  Bullish thinking will quickly fade once this latest nonconfirmation is recognized.  

Friday’s jobs report has the potential to provide very good prices to sell into.  We like to sell into the early morning strength when it occurs.  The other thing that the market is waiting for is the FOMC (Fed meeting) next week which is sure to bring another baby rate increase of 25 bps.  These two events have the potential to move the market.

We know that the market always reserves the right to rally a little bit more but as it does this the risk climbs on the long side.  For some reason the stock market has not recognized the end of the real estate boom as a time to sell, at least not yet.  The market has failed to worry about interest rates going up or gold or oil going up.  The market can continue to ignore the facts but when it finally wakes up to them, the direction Has to be down, and quickly.  

Please take some time this month to examine your positions and Do what you think you need to do…

“Sell in May and GO AWAY” and Be careful out there.

Dow Industrials:  11,438.86  +38.58
RYVNX:   18.45
RYAIX:  21.96
TLT:  83.10
BEGBX:  13.42  (dollar keeps sliding)