It looked like today was going to be an inverse mirror image of yesterday, as stocks opened lower, and hovered around the down 300 points on the Dow level for much of the afternoon. Then, once again, the last hour selling kicked in, and the market got clobbered, off nearly 500 points on the Dow and 100 points on the Nasdaq.
The primary culprit today was a week ADP jobs report, a precursor to the government’s own employment report due out Friday. The ADP report held that over 150,000 jobs were lost in the private sector. The market was already lower when this report came out, but trended lower the rest of the day.
Many other markets flip flopped from yesterday as well. The Oil complex, Grains, and Metals all sold off sharply today after nice gains yesterday. Obviously, this was in response to the weak economic data. It is notable that on many of the commodity charts, there are small consolidation patterns within their current downtrends. A break below recent lows will indicate a continuation of those downtrends. This would not surprise me as there are still many analysts on the financial news programs suggesting that energy and commodity stocks are the place to be going forward. Always be a contrarian!
On the other hand, the interest rate futures continued their rally today. It seems that Treasury traders may have been anticipating today’s data yesterday, as they rallied yesterday in the face of a weak dollar and strong commodities. In the Forex markets, the Dollar did not move much today.
Scott Cole
www.bestdaytradingstocks.com
www.kungfutrader.com
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