Let’s just say that was a pretty bad jobs report today, which obviously was the main driver for the market going down so hard. Believe it or not though, had this report come out about in November or early December, the markets probably would have gone down 8-10%. Instead the major indices averaged about a 2.7% to 3.2% decline – a far better result. That doesn’t mean that we are out of the woods, even in today’s economy, a job loss of 700k is pretty steep, and that will cause investors to rethink their strategy some.
I’m still bullish on this market, and believe that while we’re probably going to see some more of these types of road bumps along the way, that it is still worth trading to the long side in today’s current environment. After today’s sell-off neither the Nasdaq nor S&P saw any major technical damage. Wall Street is still pretty skittish, and it doesn’t take a lot for investors to take their profits at the slightest bit of turbulence.
Also worth noting is the fact that we are well overbought in this market, and today’s decline was somewhat helpful in alleviating those pressures.
Here’s the Nasdaq and S&P charts…