Thursday, November 5, 2009
Pivot Point...Will Jobs Report Cap This Rally or Extend It?
You make up your mind...is the market set to rally further or head lower?
Let's see what the Jobs Report says tomorrow, the strong nonfarm productivity # makes me bullish. Why? how much more efficient can the US worker become? Hear me out now... this is extremely bullish for company profits right?! Also most companies are running so lean & mean on the fear of a double dip recession. NOW if things start to pick up any more, they will have to start hiring, which can snowball. Jobs...Jobs...Jobs!!!! We are a service economy no longer the industrial/manufacturing lead economy. This means we can turn on a dime and hire and this economy and stock market will get a second leg up. I don't see the Fed raising rates until it is confident that the US economy is healthy. However, get ready to pull the trigger on the easy money trades, once the Fed pulls away the punch bowl (raises rates) the dollar will rise, gold will correct nearterm, longer term higher on inflation concerns.
I've posted a $NYSE chart with a 10 ma on the Advance/Decline line as well as a $NYA50R, stock trading above there 50 day moving average. My take is this rally has more to go into year end. The wild card is tomorrow morning's Job Report. But how should one interpret today's 200 [over 10,000 Dow] day? Would you be that bullish prior to a possible bearish #?
I've been bullish on Transocean (RIG) and also Research In Motion (RIMM) see next post on that.
I've also attached a video of Louise Yamada, one of favorite chartists!
*click chart to expand image