I am surprised by people standing on the sideline today because this number tomorrow has been talked down to such a degree, even a -50,000 is now going to seem like a huge victory in light of the snow. (somehow Americans were able to shop in the snow, but not find jobs - convenient) A positive number tomorrow morning? Might see a +8% day on S&P 500 ;)
That said, they did a great job of taking the market to the very top of the range in the closing 30 minutes; like setting the tball on the tee for the 4 year old to hit tomorrow morning. Over S&P 1125 I expect the computers to rush in again... on light volume of course. Does anyone remember the last time we broke out on a technical basis and then reversed - i.e. TRAPPED giddy bulls intraday? That used to happen in the good ole days, when you had to type on your computer ... uphill, both ways, barefoot, in the snow. When EVERYONE knows the pattern, yet it still works over & over & over - it seems quite suspicious. I keep waiting for the Charlie Brown moment where we all rush into the obvious trade and it reverses on us (Lucy snatches the football away), but it never seems to come anymore. At least not to the bulls... Lucy has been laughing at the bears for a year straight.
As for tomorrow's report... while I find the whole labor reports completely flawed, [Oct 2, 2009: True September Unemployment in America Reaches Towards 14%; Our System is Broken] market participants will do their normal lemming thing and treat the data as gospel. Even if a year later there are revisions downward to the tune of 800K+ as has been the case the past 2 years. [Feb 3, 2010: US to Find Extra 825,000 Unemployed this Friday after Birth/Death Model Revised] This is just the game. The obsession with any 1 data point - especially such flawed ones, that get revised months (and years in some cases) after the fact, is just as annoying as the obsession with the headline figure from an earnings report - changing the value of a company in 20 seconds after a press releases, sometimes by the billions based on nothing more than a headline flashed across the screen. Reading the actual press release or looking at an income statement? That's so old school. Now we have the new paradigm investing.... Caesars New York City style.
The last point that will be funny is how for the next 3-4 months we will celebrate the headline number (which surely will be positive very soon, if not tomorrow) with the 1.3M* census workers joining the workforce. [spread over 4 months that is about 300K extra jobs added each month] Not much will be said about the temporary nature of their work, we'll just hear chirping about how the labor market is coming back strong. Then mid fall to next winter when those census workers lose their jobs, we'll be told about how the census data is affecting the jobs data and how we should ignore it.
So to repeat... drink your Kool Aid. Ignore census workers when they DECREASE the jobless numbers in the coming few months... but remember them when they ADD to the jobless numbers in 6-9 months. Did I mention drink Kool Aid?
*do you realize they are hiring 4x as many census workers this time around than a decade ago? Have Americans lost that much ability to fill in a form or count in just a decade? Or is this just a convenient way to hide an extra unemployed 800K Americans for half a year?