Good morning. Futures are slightly higher following mixed overseas markets as investors await the jobs report. Here are the headlines for review:
- Bernanke defends low rate policy (REU)
- Investors place their money on Fed (WSJ)
- Apparel chains sweat through warm winter (REU)
- Corporate taxes fall to 12.1% (WSJ)
- Obama proposes new rules to boost annuities (YF)
- Senate OKs insider trading curbs on lawmakers (REU)
- Geithner praises progress on Dodd-Frank (BL)
- Iran warns of retaliation over oil sanctions (REU)
- Panetta believes Israel may strike Iran (REU)
- Beijing considers giving Europe support (WSJ)
- China’s PMI shows stagnation (ME)
- Greece seeks second rescue (BL)
- Portugal PM wants easier bailout terms for banks (YF)
- Spain coaxes banks to merge to purge losses (BL)
- Eurozone private sector snaps 4 month decline (REU)
- Eurozone sales tumble at Christmas (REU)
- Swiss investigate 12 banks over rates manipulation (MW)
- Regulators step up UBS rogue trading probe (YF)
- Panasonic forecasts $10 billion loss (WSJ)
- Blackstone considering buyout of Brocade (BL)
Ahead of the jobs report we didn’t make much progress yesterday as markets traded sideways. Fortunately we did have some intraday volatility and reversal pattern setups to keep us on our toes on what was an overall uneventful day.
Today we trade the reaction to the jobs report which many of you know is by far my least favorite setup of the month. In fact we’ll soon see if the market’s losing streak on jobs report Fridays (down the last 8 straight) is finally broken.
Technically, there isn’t much new to discuss as we still are keeping eye on the same bullish/bearish setups I talked about in yesterday strategy report. Remember, we’ll need to see a break above this week’s highs or lows to really make any substantive progress so we’ll see if today’s reaction to the jobs report offers any change in that regard.
The typical jobs report trade is to to fade a strong reaction in either direction and we’ve seen a lot of that same pattern of late even without this mornings’ jobs report influence. The expectations are for a gain of 125K jobs and an unemployment rate at 8.5%. Let’s see how it plays out!