Bad News Baked In?

Well.  I’ve mentioned several times that we’d have sticker shock of how bad the economy is over the next few months.  Today, the market got some sticker shock.  The number of jobs lost last month was supposed to be 335,000 based on estimates.  The actual number came out far worst than anyone predicted.  There were 533,000 jobs lost last month.  In addition, last month’s numbers were revised much worse than initially reported.

The futures immediately sold off when this number came out.  A great test for the market will be if the stock market can gap down at the open and recover throughout the day.  If it does, we may have the beginnings of a rally that could last a little longer.  I’m not counting on it though.  We’ll see what the day brings.


2 Responses to “Bad News Baked In?”

  1. 1 James December 5, 2008 at 4:59 pm

    Have you noticed recently that half to most of the calls into BizRadio have been about shorting the market via the inverse ETFs? It just seems a little too easy right now to short the market, which leads me to wonder if its a crowded trade. In a true bear market, both bulls and bears lose money.

    • 2 keggerss December 8, 2008 at 6:37 am

      James. That’s very true. It’s more logical we’d have a rally that fools people and cause those to cover shorts. I’ll analyze any rally as usual and decide if I want to short into those rallies. These inverse ETFs are such a new dynamic as they didn’t exist in past bear markets but in general I agree with your comments. On the other hand, I still hear a lot of people wondering when they should buy. That tells me there may be more downside over the next few months.

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