We are in a very interesting spot this morning.
At 8:30 we get the Non-Farm Payroll report and the whispers are all positive while the "offical" expectation is that we drop another 100,000 jobs so are expectations too low or too high? We are also almost dead center between late April’s 1,220 top on the S&P and late July’s 1,020 bottom with the S&P closing yesterday at 1,225. We had a huge "gap" as we flash-crashed from 1,200 to 1,100 in just 4 sessions in early May and we jumped off the July 1st spike at 1,010 all the way back to 1,100 in the next 7 sessions. So we are at the 1,100 middle of the range we’ve been tracking all year but we got here VIOLENTLY from both directions, establishing neither a proper bottom or proper top on the 10% outside edges of our range.
The bulls will be pointing out that 150,000 of today’s job losses will be census workers whose jobs ended and the bears will be pointing out that we need to gain 300,000 jobs a month for the next 3 years before we even rehire the people we’ve lost over that past two years so who the hell cares about any jobs number under 200,000? If the payroll report is weak, then we are more likely to get QE2 (and maybe QE3 and QE4) and the Fed will remain on hold so the Banksters should be happy too. If we get a "strong" report it will be harder to push through more stimulus and scary for the Republicans as it may give people the impression that the Government is accomplishing something so good is bad and bad is good today from that perspective.
None of this matters because Andy Zaky says we are all doomed - and he makes a pretty good case fo it too! We’ve certainly had a boring and generally bearish week as we have been protecting our gains off all those crazy bullish bets we made back when I called the dead bottom of the market on on June 6th in "Turnaround Tuesday – Will CNBC Apologize to America?" Of course, that was a rhetorical question because, rather than apoligize for their non-stop end of the World proclamations, to listen to, for example, Cramer now – you would think he was chasing people INTO stocks at the time, rather than out of them.