Market outlook for July 2 and beyond

The Unemployment rate came in better than expected at 9.5% in June versus 9.7% in May. Hours worked in June were down -0.1% compared to data for May which was up +0.2%. Private Sector jobs increased 83,000 in June compared to adding 33,000 in May. Non Farm payrolls were down -125,000 jobs. Market reaction was somewhat positive with the Futures on the Dow up 12 points. The unemployment rate percentage is better than it has been in about a year. The question of the day is whether this news is enough to stop the downtrend in the market. My view is that it is NOT because the social mood in the country is poor and depressed. Not much for people to celebrate these days. For the past 2 days we have dipped below very strong Support levels which indicate to me that the next stop will be to test 8;000 on the Dow. This will take some time, possibly the Fall, and it will not go in a straight like down but rather a series of lower lowers with small rallies up.

I will be here and reporting my views throughout the morning. Then it is off to see the Marin County Fair and my wife's art pieces which are being shown in the Fine Arts exhibit. Here below are two of her recent pieces of Metal art being exhibited. Enjoy.



Come back later today to see more on the markets. Take time to read some previous posts going as far back as March. I don't think you will be disappointed. Have a Happy July 4th weekend.

UPDATE: 7:50am PST

Well we have enough enough know to see the direction of the market after the market went up then down then up, forming a "W" pattern which slants down. So we should go lower today from the lows on this chart. Also, because Monday is a holiday, I think many will not want to be Long going into it and therefore there will be more selling than buying. Stay tuned!

UPDATE: 8:10am PST

The data is in and the Dow did go lower as the slanted "W" pattern suggested. We will have to wait to see the next "W" pattern emerge but one thing is for certain, while the Unemployment rate dropped to 9.5%, the market is in a negative mood as I said earlier and the trend will continue down in the coming days, weeks and months. It will feel like a Chinese water torture, drip, drip, drip. Hmmm, that sounds like Water Boarding and torture!

Update: 10:53am PST

Here's the last "W" pattern I am posting before the close today. To me it says we are going still lower. So far today, every call has been correct as the downward slanting red line indicates future direction. It is a good, but not perfect, predictor as you have seen. We will see what happens today, but I do not want the indexes to form an inverted Hammer pattern, closing at the low, as it would mean a reversal in trend and I just don't see it in the cards in the immediate future.