Market Analysis for Nov 7th, 2003
By Mike Paulenoff, MPTrader.com
Very interesting day in that they had wildly optimistic data come out about non-farm payrolls from the October employment report, 126,000 additional payrolls, twice as much as the Street was expecting. In spite of that, the minor first 30-minute rally in the indexes right after the data came out took the indices to new highs for the move that started last March, but they were marginal new highs, and since the first 20 minutes after the data came out, the indices have been grinding lower.
In fact, they're all in negative territory now, with the E-Mini S&P and the E-Mini Nasdaq both down about 3. Keep in mind, though, with the E-Mini S&P at 1055-56, it is 8 points below the high for the day, which occurred in the first 30 minutes, and the E-Mini Nasdaq is at 1444, 14 points below its prior high intraday.
So right now what you have is a sell-the-news type of situation. The question is: Is it merely just sell the news, pull back, and then off to the races on the upside again? Or is it sell the news and then where is the rally after the pullback (because in general the 7-8 month rally or advance is exhausted)?
The jury is still out. However, initially it seems to me there is more downside ahead. We may get a noon to 2-2:30 Eastern grind to the upside. However, the pattern carved out so far for the day argues for additional selling after an intervening rally later this afternoon.
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