Thursday, November 4, 2010

Does Anyone Care about the Jobs Data?

I've already figured out tomorrow's analysis on the monthly jobs data

If it's worst than expected, we have QE2
If it's better than expected, we have QE2

(again I am counting on better than expected because ADP report said 43,000 and birth death model says small business is booming in America so we could clear 100K easily - but it is all moot since it doesn't really matter anymore.  Data is old fashioned)

Hence no need to wake up before 9:29 AM to analyze the news. This morning weekly claims jumped some 20,000+, back over 450K but that was just a bothersome footnote.

Turning to the S&P 500 the Relative Strength index has burst into major overbought for the first time during this melt up from the August lows.   Using the 'rubber band theory', in which the market generally stalls when the index is 2.5%ish away from the 13 day moving average [Oct 13, 2010: Pulling the Rubber Band] we are also right at the full extension level.... 2.5% above the 13 day.  (the range has been 2 to 3%)  Hence if we gap up tomorrow it might be an excellent time to put some short position on (that can only last for a few hours due to Monday morning gap up)

NASDAQ has already been here (again only one >-1% loss on that one in approaching 2.5 months)

Pulling out farther, April highs in the S&P 500 are 1219.80 (April 26th).  We always seem to have trouble breaking key resistance levels during market hours, so that's why we have premarket.  Tomorrow's job report looks like a great way to ramp up futures in light trading to get over that level if we can't do it in this last hour.   Then what?  (NASDAQ already cleared yearly highs today)

3 year chart

Best I can tell something in the S&P 1250-1300 area aka 2 more gap ups aka next week.  Gap up tomorrow on whatever the news is on employment.  Then gap up Monday because it's a Monday.  Then we can start gapping on POMO days... 1300 easy.  Then 1500 in the next 6 weeks.  All time highs by Valentine's Day 2011.  POMO/QE2.  All day, every (other) day.

I am contemplating taking some profits today, and then buying back on a move over S&P 1220, but that move should come in 16 hours right?  Hmmmm


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