Jamie Dlugosch

Market Doesn't Capitulate Under Jobs Report

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Jamie Dlugosch takes a look at the hottest topics to keep an eye on throughout the day.

The market finished the first full week of trading with a whimper. The optimists will suggest that the market past an important test. With a jobs report that showed nothing but carnage for those looking for work, the stock market had every reason to capitulate. Capitulate it did not. Instead, we darn near erased the losses on the day and narrowed the volatility in the market by leaps and bounds.

Though we collapsed a bit at the close the Dow finished the day down 143 points or 1.64%. Again in October, the day would have surely been a 5% move or more.

With the gains off the lows the give backs we see lately are to be expected. In fact the moves lower after the gains are quite healthy. Rallies within a down day are also encouraging. A small retracement should not be viewed negatively from a trading perspective. In fact a few more days in the red and a big long opportunity will present itself.

I'm waiting patiently for that next crack back rally.

The economy lost 524,000 jobs in December and the unemployment rate fell to 7.2%. These are horrible numbers, but some were expecting worse. The experts suggest that the unemployment rate will fall to 10% before all is said and done.

Given the number of companies announcing job cuts that headline rate does not seem all that unfathomable. Both October and November reports received downward revisions. There simply is no way to sugar coat the news. That said the market responded fairly reasonably to the report.

Oil prices fell again mostly due to the jobs report. The economy is still in decline and demand for crude or lack thereof is trumping political news and OPEC production cuts. Oil closed below $40 on the day.

The bias will be lower as short term news will continue to show economic weakness. That will be the case until the next round of production cuts. They are coming. Mark my word. Crude is down another dollar this morning hitting $38.80 on continued worries over the economy.