Today's Comments (Short Term Outlook)                            Printer  friendly

It's all about jobs today The pullback continued yesterday, but you can hardly call it that as the damage was minor.  The Dow shed just 25-points, but the S&P 500 did lose 0.55% and the small caps of the S-fund dropped almost 1%.  The I-fund was off 0.15% and the F-fund  managed a 0.13% gain. Today will be all about the jobs report for July.  The latest estimates were for a loss of 325,000 jobs and, depending how far off from estimates the number lands, the market's direction should play off of any surprises. For the last few weeks, the S&P 500 has been in this little stutter step pattern of moving sideways for a few days, pushing up higher, then sideways gain, up higher, etc.  Today's jobs report will likely either move the pattern to the next level higher, which would be a clear breakout above the early November 2008 high, or it will break the pattern possibly kicking off the long awaited pullback.                  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk The sideways action we have seen lately has been enough to take the NYSE off of its extreme overbought levels, and down to just modestly overbought.  That is a good sign for stocks.                  Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk Taking another look at our put/call ratios shows that the dumb money continues to get more bullish, while the smart money of the OEX put/call ratios is nearing the most bearish readings of the year.                      Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk  These put / call ratios have not been the best indicators this year, but I still like to keep an eye on them.  The theory still holds for me.  The more people people that are bullish, the more likely the market will drop because if they are bullish, they have likely bought already.  The more people that are bearish, the more likely the market will rise.  Bears are not usually fully invested, so they have already done their selling.  The TSP Talk Sentiment Survey came in at 47% bulls, 42% bears this week, for a 1.12 to 1 ratio.  With the 50-day EMA still just barely below the 200-day EMA, the system officially remains in bear market rules, which keeps the system on a sell signal for next week.  I am guessing that next week, the crossover will occur and the system will change to the bull market rules.  Moving from a bear to bull stance could be a short-term contrarian / overbought indicator in and of itself.  That's all for today.  Thanks for reading!  Have a great weekend, and we'll see you back here on Monday!