Coming off a long weekend stocks jumped early and pushed higher throughout the morning. When Europe closed sellers took to the market sending stocks to new lows. Of course the movement was blamed on the union across the pond and will continue to be the excuse. The afternoon was a much different story with stocks finding support into the close. Volume was higher than last Friday, but was below average. Day 6 of an attempted rally was solid, but did close a bit disappointing given the rise in the early going.
We have been touching upon in our chat room the market putting in a lower high and lower low confirming a downtrend. There are many ways to spot new trends, but a classic formation is the market setting lower highs and lower lows. April and May’s sell off did considerable damage to the market and there are a variety of reasons for the pitfall. But, those reasons don’t matter and we should be focused on is price and volume. It is fun to have a discussion and debate what may or may not happen. However, at the end of the day the only thing that matters is price!
At the end of the week we’ll get to endure all the hoopla over the jobs report. The last few have been very disappointing and the trend has been to fall on the negative side. If you are wondering how to position yourself in front of the report read the paragraph above. Price! We’ll probably get another poor report with unemployment falling below 8.1%. I don’t trust government figures as they like to “adjust” the number to make the number look better. A true number would include those who have completely dropped out of the workforce. However, that number would be super depressing and not something any administration would want to post. The number will be the number and we’ll be reacting to the movement of the market and not our opinion.
I wouldn’t expect too much out of this market even if we do get a follow-through day. We’ll need to see new leadership form, but at this point seems like a long shot. Follow price.