It looks like a pivotal moment on the charts.
Pivotal: being of crucial importance; central, key. By pivotal is meant a key decision point on the chart.
The rally which we have had so far is within the bounds of a 'technical bounce.'
What the market does tomorrow after the Jobs Report will help us to decide if it was indeed just a technical rally, or if it is something else, up to and including a trend change into a more sustained bear market rally that might be substantial.
The Jobs Report number tomorrow in combination with how the market will react to it, is almost a coin flip at this point with a shading to bearish only because of the trend. The number should be 'bad.' We'd estimate north of 500,000, perhaps higher.
It is our estimate that any number less than 550,000 is discounted in already and will be fuel for a short covering rally with cries of 'bottom.' Any number over 710,000 will be a shock and probably will bring the market lower.
And in between is a gray area. We do not believe for one minute that the recession is at its bottom, and that blue skies are in sight.. But that may mean little when hot, restless money comes off the table, aching for higher returns and risk, eventually to be consumed by beta.
The gambler jumps in, the trader waits. We have only hedged positions on the table as of the market close, not including our long term holdings, none of which are related to equities at this time. Our goal is not to give up any money by overtrading.
