1:30pm (EST)
Futures were pointing towards a slightly higher open but Wall Street seemed confused after conflicting reports on jobs. The Challenger Job Cuts came in at 66,400 planned job cuts last month, up nearly 60% from a year ago. Meanwhile, the ADP Employment Change numbers showed 114,000 jobs were added in July, which were higher than calls for an addition of 100,000 jobs. Also before the bell, the weekly MBA Mortgage Index showed an increase of 7%, versus expectations for a 5% decrease.
The bulls took it as good news heading into Friday’s unemployment report and were able to push the market higher at the open. However, the slight pop fizzled once other economic news rolled in.
The double whammy came when Factory Orders disappointed as they declined by 0.8%. Wall Street was only expecting a 0.1% slip. Not to be outdone, the ISM Non-Manufacturing Composite index also came in short of expectation 52.7. Expectations were for a 53.5 reading.
After hearing the numbers, the market tanked and tested the lows we outlined in this morning’s update. The good news, although anything can happen, is that this could be the bottom because the selling pressure did feel a little like capitulation.
The Dow reached a high of 11,891 but quickly fell to a low of 11,700 and is currently at 11,765, down 100 points. The S&P is down 9 points to 1,245 after kissing a low of 1.234. The Nasdaq is off 15 points to 2,654 after tumbling to a low of 2,621.
We have closed two trades this week for profits of 91% and 73% and although we see some opportunities, we would still like to close a few more trades before opening new positions. There are some trades on our Watch List that look like low-hanging fruit but we don’t need to go picking today given the whipsaw action.
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