Top Line: Ok, maybe the down side move wasn't exactly "right straight ahead". This the "fly in the ointment" we were mentioning (and a hockey reference for you hockey fans, Red Wings win tonight in six). There are still some upside potentials out there but everytime the market decides to go up and can't hold it, the market losses its ability to get through prior resistance. So, we are still bearish, the only question is WHEN will it happen?
With Wednesday's rally pushing up strongly on the tech side of the house, the bears got a little scared especially at the day's highs. The blue chips had a much weaker rally than the techs. The banks took a hit on the day. The techs had giant gains during the peak of the rally about mid-day. In fact, we checked on the components of the NASDAQ 100 and we found that out of 100 companies only four were down about that time. By the end of the day there were a few more of them that were down.
On Friday they are still going to announce the jobs' report and we still think the high in the market will have been made at least by sometime Friday morning. Since the NASDAQ was so much stronger than the Dow on Wednesday and in fact the Dow actually closed down on the day. As contrarians we normally would think this is bullish but due to the position of the market we just think the market is trying to fool the people...yes, we still consider ourselves to be people.
The ADP came out with their estimate of jobs and that number was 40K and it was positive. The estimate for the Real jobs' report still is showing between 50K and 60K job losses for the month. Here we have a bit of a dichotomy with the ADP report, at least in the estimate. That doesn't mean the actual number will be that far off but we are interested in seeing if the ADP report needs to be given more credibility or not. Friday is coming.
During the day, the market was trying to remember what the Chairman of the Fed was talking about in the last few days. When the market broke off the rally this afternoon, his remarks from earlier in the week were blamed for it???
FSI: 94.51 (up but not by much)