Friday, September 5, 2008
Employment Report Much Worse than Expected
7:00 am MT: Pre-Market: The August Employment Report showed a drop in Non-farm Payrolls of 84k versus the 75k expected, which is enough to push the market down. But the Unemployment Rate jumped to 6.1% versus a 5.7% expected, which is putting the big whammy on pre-market futures.
Expect the major indexes to drop hard out of the gate, and to test the next levels of support early in the day. There's not much else to say.....this is shaping up to be a big sell-off this morning. The only thing I would caution about is that a sharp enough drop early could create a short term (but not intermediate term) selling climax. So if the Dow is down several hundred points and hits a key support, then watch for shorts to cover just on a technical climax and for no other reason. The Big Picture remains bearish, however, and today will probably move my posture even further into intermediate term Bearish. With the Hurricanes, and the possibility of catastrophic infrastructure damage due next week, it's hard to see a scenario where my posture turns bullish, at least for another week.
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There sure are a lot of long tails on the bear candles right now. Now the big $$$ question is are those ready to drop or are we actually going to stop the bleeding for a while and continue up???
ReplyDeleteDwight how on earth can one be comfortable making a decision like this. This is what kills me over and over. It seems I make the wrong one a little more than the right ones.
Please help if you can give me any hints!
Thank you.
nibbled into AIG Oct $20 puts about half and hour from opening, only to see the darn thing turn around; so took a $50 lump and got out once it poked above $22.
ReplyDeleteBoy, I feel a little out of touch with my entries so I am standing back and trade bounces intstead of breakouts.
Frustrating but I will persist!
Hope all of you are doing well otherwise.
Francis
Dwight,
ReplyDeleteI missed VC Friday but I floated the bear call on the SPY from Thursday. In the event of a bounce early week will you look to sell it for more than .11? Still holding TIF calls close to being stopped out but held on. Hopefully theta doesn't kill me by Monday.
I missed VC, too. Holding DIA puts - nearly stopping out. Looking forward to a summary, Dwight. Thanks in advance.
ReplyDeleteDwight, now that fannie and freddie are basically dead, what is your opinion of what might happen to the mortgage and housing market?
ReplyDeleteNice pop in the futures up 38 points. I guess the market likes the idea.
What does this mean to fnm and fre stocks? I guess now we know why they were down after hours by 20 something percent.
Thank you.
Steve: The biggest key to the trend or lack of it, is to keep an eye on the likely move on the daily charts.
ReplyDeleteGary: I took out the bull puts on the two IC's, but I could just as well have left them, I wasn't that worried about them. I'm holding off on the Bear Call just because I'm already net profitable on the IC's with the likelihood that the rest of the verticals will expire worthless.