Dow reclaim 13000

5/1/08

Bulls show the power and push Dow closing above 13000 first time this year ( Dow 200ma is 13054). It told me that yesterday reversal sign is not confirm but it is not false yet. Because tomorrow is the key to see if the bulls still have some steam to go up decisively. The S&P did close above 1400 (1409 just stunk in the resistance zone) If tomorrow all major indexes post strong upward closing, it is very good news for bulls because it all break the primary bear downtrend.
Still, lack of volume are an issue ( not just stock market, so is options market trading volume) and number of new highs of days are the key.
Today, initial jobless claim is reaching 380000 which is bearish fundamental. Also, we have tons of layoff announced for last few weeks. After the market, JAVA SunMicrosystem annouce layoffs 2500 jobs. Home depot is going to close 15 stores nationwide..... it all indicate the non-farm payroll number is going to be very ugly tomorrow ( censensus -70k, I am guessing the outcome would be -120k-150k). Auto sales down. Most important, state sales tax revenues delivered the weakest performance in 6 years during the first quarter 2008 while growth in overall state tax revenues continued to deteriorate, according to preliminary data in a report by the Rockefeller Institute of Government. Folks, this is very bad in addition to the GDP showing weak consumer spending(if main street believe economy health is accounted of 2/3 of consumer spending, also ask yourself "Do you find out you need to spend more during supermarket visit since beginning of this year, paying more on your gasoline, and you probably will not spend a dime more for unnessarities?). With lots of trouble in basic fundamental health, even Fed has done the easing effort and congress kick in stimules plan( which they did the same during year 2001 but the result is failed if you could remember), it cannot avert the US economy into positive zone at the second half of 2008. The Wall street is currently showing different story to all economic data so far. Therefore, the stock market seems look good for short term, but all major indexes are just flirting around 200ma area and the daily, weekly, monthly charts are all telling me it is still a bear market unless it could build a higher lows on going this month. I guess the time would show if this hope could last and works for stock market as well as the US economy. It seems it does not make sense if I say tomorrow the market would drop 300+points for the Dow if the non-farm payroll number is far from estimate.( This is just a gut guess since market still have positive sentiment so far) It could happen if the US dollar is crashing together with the number compare to Japanese Yen. Check the USD/JPY chart with S&P/Dow stock chart and you all know what I mean. Let us see if bulls are still have upper hand.