Anyone with a modicum of experience in asset markets knows that such universally anticipated events like an FOMC meeting or a payroll employment report act as a sort of cathartic event. That is, such events typically (but not always) act as bifurcations, as pivot points, for the larger degree trend already underway in the underlying psychology of the marketplace. They can act to provide a "blowoff" (final) phase to a trend up or down or they can act as the "point of recognition" phase to a trend, where the dominant (larger degree) trend becomes clear.
Tomorrow's employment report will be no different, as the underlying short term trend (as we've been following it with our Elliott wave, Fibonacci, and Demark work for the last few weeks) is clearly up from the 8/13 lows. But is up within the context of a larger degree downtrend from the Q1:04 peaks. And further, as our intraday flash made clear today, that short term uptrend from the 8/13 lows is coming into some very important resistances and showing some usually important trend exhaustion signals.
Net/net then, we have a dominant downtrend in place from the Q1:04 peaks, a short term uptrend from the 8/13 lows that is showing multiple signs of nearing exhaustion, and we have a universally anticipated macro event in the form of payrolls tomorrow morning.
These are precisely the set of initial conditions one would expect to provide such a cathartic event for aggregate psychology. At such times, the actual number really won't matter: it is how the number is perceived relative to the trend of, first, the short term psychology, and second, the long term psychology, that matters.
With bullish sentiment right at the peaks in extremes seen at every important price peak in stocks this year (see the intraday flash note for details), what are the chances that the employment report is going to be viewed in a wildly bullish fashion?
To paraphrase Pearl Jam: "it's resolution, baby."
n on this website solely reflects the analysis of or opinion about the perf=
ormance of securities and financial markets by the writers whose articles a=
ppear on the site. The views expressed by the writers are not necessarily t=
he views of Minyanville Media, Inc. or members of its management. Nothing c=
ontained on the website is intended to constitute a recommendation or advic=
e addressed to an individual investor or category of investors to purchase,=
sell or hold any security, or to take any action with respect to the prosp=
ective movement of the securities markets or to solicit the purchase or sal=
e of any security. Any investment decisions must be made by the reader eith=
er individually or in consultation with his or her investment professional.=
Minyanville writers and staff may trade or hold positions in securities th=
at are discussed in articles appearing on the website. Writers of articles =
are required to disclose whether they have a position in any stock or fund =
discussed in an article, but are not permitted to disclose the size or dire=
ction of the position. Nothing on this website is intended to solicit busin=
ess of any kind for a writer's business or fund. Minyanville management=
and staff as well as contributing writers will not respond to emails or ot=
her communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.<= /p>
Daily Recap Newsletter