Whipsaw Action
So non-farm
payrolls fell 223,000. So the unemployment rate is up to 4.5%…so
the donutheads on TV said that this almost ensures a recession and that it will
only get worse…so Maria Bartiromo looked like “The Undertaker” this
morning when the futures were trashed…so Colby votes off Keith
instead of Tina (what an idiot!)…so the market has to go down because
all of this. Well, I have news for you. The market just doesn’t want to go down,
right now.
First off, why would anyone be surprised by the employment numbers? You have to
be not just a donuthead, but in fact a zipperhead (which is one notch lower than
a donuthead) not to realize this was going to happen. Every day, we are being
bombarded with layoff after layoff from major companies. This always leads to
more layoffs in smaller companies that may produce or supply to the biggies. I
suggest all this bad news is baked in the market’s cake and more importantly,
the market seems to agree with me.
The number that came out today is
about the Past. That is the operative word when
looking at the market. I can sit here writing from now to the end of the month
and tell you all the bad news going around. That is just reporting. The
market does not report The Past. It forecasts the future. And no one — I say no
one — can tell you what things will be like a year from now. The
moral of the story (and I say this bluntly) is that anyone can tell you how bad
things are. That’s the easy part. The news is the news. But not everyone
understands my first motto of the markets. I have lived by this motto for years.
It is simple and it works: “Forget the news. It
is not the news that counts. It is how the market reacts to the news.”
If today’s news really counted, then
how come the Nasdaq dropped 70% starting in last March while all the news was
good? Ahh, the market looked forward at worsening times. Maybe, just maybe, the
market is looking at better times ahead right now. The action since my report of
April
11 certainly has dictated that. And guess what? The market always has the
final say.
The markets had an excellent reversal day
today. I
expect a lot of whipsaw action at this point in time but until the market proves
otherwise, I believe we are still in the midst of an intermediate-term rally.
Whether or not this turns into a new bull market is anyone’s guess. There
continues to be definable resistance on the Dow at 11,000. The S&P 500 and
the Nasdaq still have major resistance to overcome all the way up.
No quality breakouts
materialized over the past couple of days. The good news
is that there aren’t many stocks breaking down.
If
I find anything over the weekend, I
will report them on Monday.
Have a great weekend.