US equities posted a quiet session ahead of the ominous US nonfarm payroll & unemployment report. As expected, the markets were relatively quiet ahead of Friday's data release, which is expected to show the highest unemployment rate in 16 years and a loss of nearly 500,000 jobs based on a consensus reading of economists. Despite the foreboding release of this data, the overall market was able to close slightly positive as buyers came in to test the high end of the narrow range to pick up values in sectors such as energies. The sector staged a strong fall yesterday as crude oil prices retreated over 10% on a bearish inventory report. The energy market seemed to find a bottom at the close of today's session at this apparent floor spurred confidence in the sector, which overall has high levels of cash and a relatively steady stream of earnings from traditional & alternative energy projects- a benchmark of the new administration's proposed $775 billion stimulus plan. The markets seemed to be on a course of portfolio building today laying out foundations for the New Year by using companies that have transparent revenue streams. The rally occurred after equities initially fell in the early session on reports from retailers of dismal holiday sales.
Citigroup gained after agreeing to support legislation that would allow for bankruptcy courts to reset mortgage rates for homeowners facing foreclosure, streamlining the process that would let homeowners stay in their properties and lessen the amount of foreclosed inventory landing in an already flooded marketplace.
Technically, Dow futures followed the expected pattern testing the strong support level of 8600 before rallying on late session buying. The support at 8600 remains in place, with a build of upward momentum the contract could reach up to a resistance point of 8830, with next level of resistance near 8915.
Expect strong volatility, particularly in early Friday session. Be care & risk/reward aware.