Home > Uncategorized > MARKET ALERT 2009/12/04: “WHAT? THAT KIND OF NUMBER AND NO TECHNICAL VIOLATIONS?”

MARKET ALERT 2009/12/04: “WHAT? THAT KIND OF NUMBER AND NO TECHNICAL VIOLATIONS?”

▪  WHATEVER ONE MIGHT HAVE EXPECTED IN THE RAW US EMPLOYMENT NUMBER THIS MORNING, THE MARKET REACTION IS NOTHING LESS THAN STUNNING. ESPECIALLY IN CONSIDERATION OF THE PREVIOUS MONTHS’ REVISIONS TO JOB LOSSES, THERE IS A REAL QUESTION WHY THE EQUITIES ARE NOT PERFORMING BETTER.   Equities failing to push above key resistances and Tolerances is nothing less than really stunning. It would seem that this report response is consistent more so with the markets indicating this is as good as it gets, and knowing that reality is going to set back in from here.

▪  While that may seem a bit speculative, this is very similar in its psychological complexion to the market reaction when the equities failed to perform in early May of last year. On May 2, 2008 a surprisingly constructive US Employment (APR 2008) report was released as the DJIA was already near the critical next incremental resistance at 13,100. It stalled at no better than that area, and continued to respect it as resistance during the following month’s relatively constructive economic data. Much as now, there was a lot of discussion of the market anticipating the major improvements in the economy, and being willing to therefore “look past the trough.”

Unfortunately, it fell into it instead. While only time will tell, today’s reactions across multiple asset classes (as we noted might occur) in the wake of this morning’s phenomenally constructive US Employment report are very interesting with Gold failing, bonds less weak than might have been expected and the US dollar strengthening.

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