Significant Events for tomorrow:
Initial & Continuing claims at 0830
ISM Index at 10.
Comments...
ISM: Very important, perhaps the most. If ISM over 50 then this market could rip to upside. Last month I think 50.9 and views for this month's report is about 48-49. Numbers below 50 indicate recession. But market expecting a bad number so may discount it some. If the number is very low (say 45), then would expect a volatile selloff. But if market selloffs off some, then builds an intraday base and moves up then I would be careful. A positive reaction to a bad ISM number should be taken as a bullish sign until intraday action confirms otherwise. Regardless, ISM should create some whipsaw action that we will just have to gauge and see how it goes...
Jobs: Any claims number above 400k reinforces idea that things aren't going well, especially if over 410k. In my mind there is a healthy chance that this can occur (but not certain). So somewhat of a wild card. I'm more looking to the jobs report Friday and the idea that there are likely many more folks laid off than the ADP Report would show due to Verizon strike, FAA layoffs due to Congressional ineptitude... so tending to expect low numbers for the Jobs report. They are expecting around 75k (perhaps as low as 50k) on the non Farm Payroll report Friday am. If we get very far under this range, then the ADP report of 90k this morning will be a distant memory.
Just some data points to keep in mind...not sure what this market is doing here, but suspect it wants to go higher first say to 1252-60, but if this data is very bad, we could see a nasty reaction at least intraday. Not sure how thiss will settle out. Mike
