This Week in Stocks: 7/28 - 8/3/07

**Show-me** · 08-02-2007, 12:57 PM

http://www.briefing.com/GeneralConte...05LookingAhead

Employment Report Preview

Last Update: 01-Aug-07 12:37 ET

Payroll growth has averaged 145K over the first half of 2007 with a 100K range (February's 90K to May's 190K). Briefing.com estimates a slightly stronger 150K July gain as the consensus is a bit lower at 130K

As seen over the last three months, we expect service-providing jobs to rise more than the total as good-producing payrolls (including manufacturing and construction) are expected to decline. The market seems better prepared for a downward surprise given the low 48K estimate for non-government payrolls from ADP -- the company many put in charge of payroll distribution.

Briefing.com expects a rise in the unemployment rate to 4.6% from the 4.5% of the prior three months and the cyclical low of 4.4% in March. The consensus call is for a steady 4.5% rate. The low labor participation rate leaves an uncomfortably low unemployment rate for the Fed given its influence on labor costs and underlying inflation.

**tsptalk** · 08-02-2007, 04:07 PM

RevShark is giving this rally a little room but plans to start going short.

**robo** · 08-02-2007, 11:17 PM

Is The Selloff Over?
The second triple digit advance for the Dow Jones Industrials (DJIA) in as many days has many asking if this is the end of the decline and the beginning of a new advance. What happens next?

There are many positive signs that the fast and furious decline may very well have done most of the damage and relieved the overbought conditions of the stock market. The Volatility Index (VIX) has reached highs not seen since 2006. Typically a high VIX reading, an indicator of fear in the market, leads to higher highs.

The S&P 500 Index (SPX) reached the 200-day moving average. Quite a feat in only two weeks of declines. But when it reached that well recognized support line, it rallied and closed the day with a huge gain.

We may have seen the bottom, but if you take long positions, use sell stops at the lows to protect against the possibility that the market will fool everyone and continue lower.

http://timing.typepad.com/timer/

**Show-me** · 08-03-2007, 12:34 PM

92k actual 135k expected 126k prior 132k revised from.

Another big miss.

**nnuut** · 08-03-2007, 12:39 PM

Originally Posted by Show-me

92k actual 135k expected 126k prior 132k revised from.

Another big miss.

No Sir, I Don't Like It!!

**Show-me** · 08-03-2007, 12:47 PM

Originally Posted by nnuut

No Sir, I Don't Like It!!

Looks like neither do the OSM's.

**clester** · 08-03-2007, 12:49 PM

Talking heads say its a non-event. I hope so.

**nnuut** · 08-03-2007, 12:50 PM

Originally Posted by Show-me

Looks like neither do the OSM's.

Tom hit the nail on the head this morning, SOOOO you never know!!!

"My thinking on the jobs report is that a weak number could spook the market, but with the Fed on deck this coming Tuesday, a weak number would also put an interest rate cut back on the radar. There are many who believe we should get a cut based on the subprime lending and housing issues. A weak report would add fuel to that argument. On the other hand, an overly strong report will tell us the economy is still on track, but the rate cut would be less likely. Which way it goes, I don't know."

**tsptalk** · 08-03-2007, 07:25 PM

Cramer and RevShark are going at it on RealMoney.com. Cramer says a rate cut by the Fed will save the market. RevShark thinks it will spook the market into believing things are worse than we think.

**tsptalk** · 08-03-2007, 07:37 PM

We're on pace for the lowest close in the S&P 500 since early April.

**clester** · 08-03-2007, 08:29 PM

Have we hit bottom of the psychology curve yet Tom?

**tsptalk** · 08-03-2007, 09:01 PM

Surprisingly, the AAII survey, which had been much more bearish than you'd expect during a big bull run as we had the first 6+ months of the year, has not turned overly bearish yet during this downturn.

Our sentiment survey here is very neutral but even the 1.10 to 1 ratio the week before is not at fear levels.

If we get continued failed rallies that lead to lower lows, it will eventually wear on the bulls and those surveys will get overly bearish. It just hasn't happened yet. Every time you hear someone (less sophisticted in the market) say they want to buy this dip (outside of for a short-term trade) we are that much further from a bottom. It's when no one wants to buy it when the bottom will come.

I am surprised the relief rally was so brief myself. They usually last a week or two and suck in more people.