Bulls Looking Nervous

9:00am (EST)

Chalk another week up to the bears, as weak economic news and less-than-stellar earnings continued to weigh on the market. The biggest headline came on Thursday when France and Germany so no way to a “euro bond”, and an uptick in weekly jobless claims added up to another rough week for the bulls.

The bulls were able to continue their winning ways on Monday from the prior week by adding another 2% to their 3-session rally as they pushed through the first level of resistance. The Dow was pushing 11,500; the S&P 500 was above 1,200; and the Nasdaq was trading at 2,555.

On Tuesday, the bears took back half of Monday’s gains as nervousness over talks between German Chancellor Merkel and French President Sarkozy, who got together to discuss the euro’s problems, left Wall Street on edge. While most traders penciled-in good news, it wasn’t, and nothing really got resolved.

Wednesday was a flat day for the indexes although the Nasdaq finished in the red by 0.5%. There was a little caution ahead of Thursday’s jobs numbers, and we were figuring on a flat report, but there were others nuggets of info due after the opening bell that worried us.

The market was already in turmoil before Thursday’s open as fresh worries over the euro caused another round of selling pressure but the real shocker was the Philly Fed number which came in at negative 30. Jobless Claims were up to 408,000 and back over 400K.

We knew going into Friday, the momentum was to the downside but the bulls put up a fight until lunchtime before packing it in for the weekend. As a result, the major averages fell almost exactly on our downside targets as traders’ seemed hesitant in staying long.

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