Sunday, February 04, 2007

Jobs' Report Fairly Neutral for Stocks

Market Action:
Friday morning got started with the jobs’ report which was fairly neutral in our opinion.  The 111K new jobs reported were just shy of the 150K expected but the earlier months were revised upward enough to offset the different and more.  The market reacted in a similar fashion, fairly neutral.

The SP 500 happened to be the steady performer with a gradual upward grind for most of the day even though it only advanced a couple of points.  The Dow was down on the day with no particular reason.

The Dow Jones Transports have been trudging higher and have now put the world on notice that the Dow Theory is bullish since they are confirming the new high in the Dow Industrials.  We don’t think that’s going to bear any fruit, buying now After the trigger.

Real Estate:
We wanted to make a quick mention of an article that surfaced in our reading this evening.  On page A1 of Monday’s WSJ there should be an article entitled “Vacant Homes For Sale Cloud Economic Hopes”.  We encourage you to find a WSJ and read that article.  It mentions that the homeowner vacancy rate, “an often-overlooked measure of how many homes for sale in the country are empty…has climbed to its highest level since the Census Bureau began tracking it four decades ago.”  

Opinion/Analysis:
With the market in no hurry to do much of anything, there really isn’t much to report this evening and we again wait until Monday for some clues as to the market direction.  But, we are getting ever so close to a top in the Dow.  The only question we have is “When?”

As time passes, the mid-January peak in the NDX, NASDAQ 100, is looking more and more like a spike high and a top.  This past week’s showing for the stock market in general was reported to be a good positive week but the NDX doesn’t really share in the “New High” fever.  And, as strong as the SP 500 has been, it does not have a “new high” in place either, just a relative new high.

Our indicators are overbought and ready to help roll this market over.  The Dow is soon going to finish its last gasp move and it will roll over and head down along with the NDX.  In the mean time we are looking for a good place to get aggressively bearish and we think that will be in the next two weeks.  We already feel strongly about the NDX and now it’s just a matter of time for the Dow.  When it starts to roll over, then we will see a flood of sellers.  

In our next post we will make some comments on precious metals.  As a preview, we think silver has a big move coming up which will help shape PAAS’s future.

Upcoming News Events for the Week:
January ISM Non-Manufacturing Index—Monday
Not much else worth mentioning here.

Dow Industrials:  12,653.49  -20.19
VIX: 10.08
HUI:  332.32
QQQQ:  44.16
RYVNX:   16.56
RYAIX:  21.18
RYCWX:  34.61
TLT:  87.20
BEGBX:  13.53

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