over the past few months, this market has struggled to price in the fall-out from the credit market meltdown, the collapse of the housing market and the resulting slowdown in the economy. each time we’ve rallied on news of some fed action or positive development in the financial sector, the market has turned back lower.

however, over the past few days, the action has improved considerably. after tuesday’s big surge, the market has tenaciously held on to it gains and remains above important technical levels - if you believe in those. no, the litany of problems hasn’t gone away, but recent action may be suggesting that the market has priced all of those issues in and is starting to look further ahead.

this morning’s reaction to some ugly jobs numbers is a case in point. despite expectations for a loss of 50,000 jobs, the government said the economy shed 80,000 and the previous month’s numbers were revised lower. obviously the economy is slowing at an accelerating pace.

such a muted reaction to what is a concerning number may start to scare some shorts off and start getting others scared that, even if the worst might not be over, it might at least be priced in.

regardless, the thing we need to do is recognize that the action looks to have improved and consider the possibility that a shift in character may be taking place.

although some will have a problem with the volume level, the market hung in there today as the major indices drifted lower in the later part of the day after sporting gains of between 0.5% and just over 1% to finish in mixed territory. the speculative activity seen over the past few days really started to gain some traction late in the morning and into the early afternoon, so it wasn’t too surprising to see traders start taking profits into the close. given that we may still be in a downtrending market, and how long it’s been since traders have had the opportunity to play some decent momentum, it was understandable that they wouldn’t be inclined to keep too much exposure over the weekend.

that said, the start to the second quarter has been encouraging, but with earnings season looming, the bulls are going to need some good news to spark the next leg higher. the economic data has been poor, but not terrible, and that’s what’s brought us this far, but many suspect that we’ll need a real positive catalyst to push us higher.