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MV Weather Report: Will Job Numbers Bring Hailstorm?


Rain or shine, we review the day's biggest stock stories.


A poor reading by the ISM index knocked stocks back today. For the month of September, the index came in at 52.6 compared to analysts' estimates of 54.0. During the month of August, the ISM had a reading of 52.9. A reading of over 50 is supposed to signal expansion in the economy so technically, the economy is still growing but slower than what was forecasted.

Seconds after the release of the ISM the selling pressure was on. The dip buying bulls didn't have a chance today (though they tried) as the S&P 500 closed lower by -2.58% to 1029, right on the low of the day.

Today on the Buzz and Banter, Professor Jeff Cooper gave his thoughts on the action in the index.

"With quarter end most mutual funds can "legally" sell not having to show the SEC that they are "fully" invested again until December 31st.

"They didn't have to sell but it looks like their inclination was to sell once the quarter was over.

"Be that as it may there is a large IPO calendar set and you can expect houses to recommend the big names to buoy the market. The market's reaction to these upgrades, reiterations and target practice will be interesting.

"Now that the Weekly Swing Chart has turned down on the S&P, a snap back rally see a retracement toward the October 8th pivot.

"That turning point sets up as it is 90 degrees from the July 8th low.

"However, the question is from where a retracement COULD begin. It is worth considering that a measured move from the 1077 'square out' projects to 1031ish while 180 degrees down from 1077 high equates with 1014. That is an interesting number as it defines a possible backtest to a Fibonacci 38% of the entire bear market."

The rush for the exits was on today as even the big momentum names struggled: Baidu (BIDU) -4.87%, Apple (AAPL) -2.42%, First Solar (FSLR) -5.95%, Wynn Resorts (WYNN) -7.45%, and Agnico Eagle Mines (AEM) -5.39%.

Tomorrow has the chance to be just as ugly, as the jobs number will be released at 8:30 AM as will Hourly Earnings, Average Workweek and Unemployment Rate. Factory Orders are at 10:00 AM.

The reason it could get ugly is -- around the three o clock hour -- Reuters reported that Goldman Sachs revised its number for the nonfarm payroll release to -250,000 from -200,000. Most analysts on the Street are looking for a number of -175,000. Last time there was a big discrepancy between Goldman's estimate and the consensus Street estimate, guess who nailed it? Goldman Sachs.

On a final note, keep Professor Cooper's 1014 level on your radar. That could be the spot where the bulls try and make a stand.

Have a great night!

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No positions in stocks mentioned.

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