On Thursday a lot of folks where looking for a rally to occur after the jobs report was issued this morning. Many didn't even think the level of the numbers mattered that much. The logic was that the worst was already baked in, so the buyers would quickly jump in on some weakness. Given the recent price action, that didn't look like too bad of a bet.
The jobs report turned out to be pretty close to expectations and, to the surprise of many, the immediate reaction of the market was to do nothing. When the bulls realized that there was no one jumping in to push us up, they hit the exits, and we went straight down in the first 30 minutes of trading.
After that, we meandered about until the typical final-hour spike-fest, which jerked things up, down and all over the place. This last-hour stuff is just totally random as traders push things around, and it makes holding positions extremely tough.
On a bigger scale, the major problem this market is dealing with is trying to figure out whether we really have priced in all the bad news out there. Investors want to believe that we have, but when you really delve into some of the details of things like the unemployment rate, it is awfully tough to imagine a quick and easy economic recovery.
In addition, we have earnings coming up, and analysts have been very busy downgrading things before they hit. Expectations are going down, but we don't know if they are going to be low enough.
The choppy action and confused investors are keeping this market very difficult. The technical patterns are still OK, but they are eroding, and we need some strong buying conviction pretty soon if we are going to manage any sort of bear market rally.
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