Unemployment Report Trading Day

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The monthly unemployment figure were released this morning at 7:30 AM 9cst). The unemployment rate was the key surprise as it was reported to have risen to 10.2 pct. We don’t recall seeing any estimates above 10.0 pct. The non-farm payroll number was within the range of estimates at 190,000. There was a downward revision from the previous month.

The market went in to the report on the heels of a rally. It surprised us that with what appeared to be strong momentum that the S&P 500 was unable to trade through the .618 Fibonacci retracement level formed using the October 21 high and Nov. 2 low. (As illustrated in the chart). It has also stopped at the March / July uptrend which has posed resistance as a return to trend. However, the S&P has crossed back above its 50 day moving average closing above both Thursday and Friday.

The market did sell off after the release of the report but held and after trading quietly for a good part of the session was able to muster a rally not quite back to the highs of the day going in to the close. We believe this sets up another interesting and potentially volatile week beginning Monday. Possibly even Sunday night.

Good trading all

Jeff
CB&S

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