Market Analysis for Sep 5th, 2003

The reaction to today's jobs report is nothing short of remarkable. The jobs report was much worse than expected. 93,000 people dropped off of payrolls in August, and they were expecting about 20,000 to be added to payrolls. So there was a shock value to that. Despite the shock value, the market barely sold off in the aftermath of the release of the data, so psychologically the market is where it has been for days. That is to say, despite an overbought condition and despite doubts the economy is picking up at least as far as labor is concerned, there are no sellers. There is just no selling pressure. While the indices have been stuck in a range for the last 2-3 days basically, that range is at the very top of the entire move from the March lows.

So it's not like you sell off and go into a sideways range where you're not sure if it's a base for a new move up or a consolidation for a move down. This market just doesn't give up much ground at all. The E-Mini S&P 500 has been trading between 1022 and 1030 since Wednesday. As we speak now at noon on Friday, you're at 1028. It looks to me based on my work that as long as that 1022 to 1020 support area holds, this consolidation period of three days will resolve itself in a surge to the upside that has a measured target somewhere around 1036. Perhaps it gets to 1040 on an overshoot. That's the way things appear to be heading right now.

As far as the E-Mini Nasdaq is concerned, it's sitting literally at the high for the last six months at 1380. It doesn't look like it's done yet. To me it looks like it wants to make new highs of a minimum of 1390, perhaps even 1400, in the September contract before you start to see some emergence of sellers.

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