Wednesday, August 3, 2011
Going straight to 1,200
Watch 1,249 on the S&P 500. That is the March low, and we are only a few points above that level right now. If we break through that level, there is no support all the way down to 1,200. I think that's where we are going. The ADP report showed 114,000 jobs added. That is a good number, but stocks don't care. Stocks are bouncing around the flat line as we await the ISM Services sector report due any minute now. If that number is ugly, we are going down further. The other reports this week - ISM Manufacturing, and the consumer income and spending report, were both negative. I would expect the services sector report to be equally negative. We have also had a 60% increase in companies reporting job cuts to come, so we will have to push through that in the coming months, even if Friday's employment report isn't so bad. The ADP report has not lined up well with the Commerce Department report in the past few months, so I can't really say that the ADP report makes me feel any better about Friday's report.I think, even if the Friday unemployment report is positive, stocks will still probably sell-off.