Today's Comments (Short Term Outlook)                             Printer friendly

Jobs Report As we talked about on Wednesday, stocks have chopped around after Tuesday's big rally; hitting the upper resistance but keeping a positive bias leading into today's jobs report.  This report should tell us the next chapter in the story. One possible conclusion would be that the S&P 500 breaks above resistance after a good jobs report.  I would consider anything above the 50K consensus estimate loss as a positive report.  If we see a report that gives us a loss of more than 70K jobs, I can see the S&P 500 heading back down toward the lower end of the trading range.  Anything in between the -50K and -70K and it's up for grabs for either the bulls or bears to take.                                      Chart provided courtesy of www.decisionpoint.com The fact that a recession is almost a given at this point, I don't know how much the market will sell off if the jobs report does turn out to be poor.  Any emotionally driven strong reaction in the market caused by the report, could be setting up an equal and opposite reaction.  In other words, if we sell off big, it could be a good buying opportunity.  If we rally strongly, it could be a good  selling opportunity.  That is only looking at the short-term picture.  I suspect that we could be in for more chopping around while the financial crisis and recession concerns play out.  The downside could be limited with support holding, because of those who feel all of the negativity is already priced into the market.  They are willing to buy the dips. I know I am sounding like a broken record lately.  The fact is there is solid evidence on both sides of the bulls / bears fence - hence the possible choppy market.  The experts seem split on what happens next.  Our premium services are also giving us mixed messages.  Not surprisingly, the TSP Talk Sentiment Survey came in with 44% saying they are bullish for next week, and 43% saying they are bearish.  So, for the short-term the market will likely be driven by today's jobs report.  As you look out further, we'll want to see how the chart develops before picking a side.  That's all for today.  Sorry I couldn't be any help.  It's a tough call and we'll have to see how it plays out.  Have a great weekend! Have questions?  Visit our message board for answers.  Would you like to be on our email alert list?  We will send you an email when there is a change to our asset allocation or market outlook.  Your email address will never be given out.  Read our privacy policy.  By signing up you agree to the TSP Talk Terms of Service.  More details below **. Are you bullish or bearish?  Join the Weekly Sentiment Survey. Like what you're reading?  Tell a Friend about us.