Market outlook for Friday Dec. 5th, 2008: Unemployment jitters rule the day! UPDATED
Going into this Friday Unemployment numbers, there is a lot of anticipation of a negative number with many saying they won't even believe a positive number. Yesterday's market action resulted in all three Indexes down. The Dow lost 215 and is now at 8,376. All three Indexes continue to stay below its 20 day Moving Averages. The big 3 Auto makers had their day with the Senate trying to convince them that their plans for recovery are real and that they should just be given a bailout. This seems highly unlikely as Sen. Chris Dodd and Sen. Harry Reid don't seem inclined to even take the vote. Not sure if that is because they don't have enough Republican support or if they don't also have enough Democratic support. Seems like most are coming around to the original proposal that they must go into bankruptcy, as a precondition for any funds.
So what will happen today? It seems unlikely of a positive move up today or even going into next week. I noticed that the volume yesterday was not high compared to previous days of the week. Thursday is usually the highest volume day of the week with Monday the lowest volume day of the week. Usually Friday's are about the same volume as Tuesday's. But this week has set up that today may be the greatest volume day of the week.
I just am hard pressed to believe there are going to be any buyers yet. So with some still selling and no buyers the forces of energy point down for all 3 market indexes. SDS continues to look attractive to me going into the next week. This cloud is also affecting the Christmas Retail sales and that shoe will drop in early January. I believe it is going to take until we have a new President, before there is any hope our economy has a chance for recovery. So we are in the most negative time right now. If we can get through this period we have a chance to reverse the psychology of the average investor. We should all be grateful we have at least some hope with the inauguration of President-Elect Obama on January 20th. He has inspired the Country and is doing his best even before taking office that he knows what he is doing and is a different kind of politician. Thank God.
I will update this after the Unemployment numbers are out and the market reacts. Going into the numbers at 5:00asm PST, the Dow Futures point to being down about 40 points.
UPDATE 5:35am PST
Well the Unemployment rate numbers came in worse than expected. The number of jobs lost were 533,000, which will scare many of those still employed. The Unemployment rate rose to 6.7% and would have been much worse except the fact that many unemployed have given up looking for work. To put this in perspective, President-Elect Obama wants to create 2.5 Million jobs over 2 years which is about 100,000 jobs created every month. In today's numbers that loss of 533,000 jobs represents about 5 months to gain back in a best case scenario. markets will react negatively. Only Short positions like SDS will help save or minimize the effect of the drop in market value. In my view this accelerates the possibility of help to the Auto industry. Today's numbers strengthens the case for a bailout quickly even if modest enough to review it again after Obama takes office. This makes Ford more attractive today to me.
UPDATE 1:30pm PST
The Dow finished up 259 points to close at 8,635 surprising even me after a terrible Unemployment report this morning. The market shrugged off the news and appeared to finish strongly and on higher volume than the previous 4 days. All 3 indexes, the Dow, S&P 500 and Nasdaq Composite, closed above their 20 day Moving Average. And while Volume was the best of the week today it was not convincingly higher to give more credence to the move up. I am still a doubter and the safe side of this market is Short, not Long. If the Bulls can get some strong volume going, it might be convincing but many just have been burned before and are reluctant to take a plunge back in. I will write again in the premarket on Monday, so check back if you are following this Blog for a market outlook. I may write over the weekend on other topics like the Auto bailout, prevention of home foreclosures and other topics of interest.
So what will happen today? It seems unlikely of a positive move up today or even going into next week. I noticed that the volume yesterday was not high compared to previous days of the week. Thursday is usually the highest volume day of the week with Monday the lowest volume day of the week. Usually Friday's are about the same volume as Tuesday's. But this week has set up that today may be the greatest volume day of the week.
I just am hard pressed to believe there are going to be any buyers yet. So with some still selling and no buyers the forces of energy point down for all 3 market indexes. SDS continues to look attractive to me going into the next week. This cloud is also affecting the Christmas Retail sales and that shoe will drop in early January. I believe it is going to take until we have a new President, before there is any hope our economy has a chance for recovery. So we are in the most negative time right now. If we can get through this period we have a chance to reverse the psychology of the average investor. We should all be grateful we have at least some hope with the inauguration of President-Elect Obama on January 20th. He has inspired the Country and is doing his best even before taking office that he knows what he is doing and is a different kind of politician. Thank God.
I will update this after the Unemployment numbers are out and the market reacts. Going into the numbers at 5:00asm PST, the Dow Futures point to being down about 40 points.
UPDATE 5:35am PST
Well the Unemployment rate numbers came in worse than expected. The number of jobs lost were 533,000, which will scare many of those still employed. The Unemployment rate rose to 6.7% and would have been much worse except the fact that many unemployed have given up looking for work. To put this in perspective, President-Elect Obama wants to create 2.5 Million jobs over 2 years which is about 100,000 jobs created every month. In today's numbers that loss of 533,000 jobs represents about 5 months to gain back in a best case scenario. markets will react negatively. Only Short positions like SDS will help save or minimize the effect of the drop in market value. In my view this accelerates the possibility of help to the Auto industry. Today's numbers strengthens the case for a bailout quickly even if modest enough to review it again after Obama takes office. This makes Ford more attractive today to me.
UPDATE 1:30pm PST
The Dow finished up 259 points to close at 8,635 surprising even me after a terrible Unemployment report this morning. The market shrugged off the news and appeared to finish strongly and on higher volume than the previous 4 days. All 3 indexes, the Dow, S&P 500 and Nasdaq Composite, closed above their 20 day Moving Average. And while Volume was the best of the week today it was not convincingly higher to give more credence to the move up. I am still a doubter and the safe side of this market is Short, not Long. If the Bulls can get some strong volume going, it might be convincing but many just have been burned before and are reluctant to take a plunge back in. I will write again in the premarket on Monday, so check back if you are following this Blog for a market outlook. I may write over the weekend on other topics like the Auto bailout, prevention of home foreclosures and other topics of interest.
Labels: Dow, Ford Motor Co., President-Elect Obama, Retail Sales, Sen. Chris Dodd, unemployment
posted by Charles Amico at 4:38 AM
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