Of course, as soon as the proclamations started hitting about how all the bad news has been priced in and how we have seen the lows, the market sold off hard. Obviously there is a lot of nervousness in front of the jobs report tomorrow, with talk that we could see 500,000 or more jobs lost. That is frightening, and even though we have been buying the bad news lately, traders still want to see how bad it is before they jump in.
On Wednesday the market sold off very sharply as we awaited the Beige Book report. The buyers piled back in as soon as the news hit, and we went straight back up to the day's highs. Many traders are looking for a similar reaction to tomorrow's job report. The only problem is that so many are looking for it.
The good news for the market is that even with the selloff today, we are still holding above the lows we hit on Monday and Tuesday. That level is 815-818 on the S&P 500 and is being watched very closely by technical traders.
I expect some wild trading on the jobs number tomorrow, but I'm feeling optimistic that we may have some decent upside trading into the end of the year, and today's dip actually makes for a better setup as long as we hold those lows.
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