Jobs, Jobs, Jobs

As we can see from today's weekly Jobless claims it gives you a solid picture of the state of employment. The street was expecting 8,000 new claims and got 10,000 and the market sold off across the board.

Tomorrow will show the state of January's Unemployment. Expectations are for a 10.1% unemployment on non-farm payroll a slight increase from 10%. Anything over that will create a wider sell-off. You're seeing a flight to safety as the U.S. Dollar hits it's 7 month high against the Euro and the 10-year note up 1/4 to yield 3.676%. The flight to safety shows the markets reluctance to take risk in equities. Why take any risk if you can make money not? You wouldn't. Funds are still looking for a drop off on the equity side to get long. Still a lot of cash sitting on the sidelines and the individual investor is still plowing cash into Bonds.

Even with the growth of the economy Cisco's great numbers and forward looking statements we can see that the traders are focused on one thing-Jobs. People can't buy goods and services without them.

If we look at the charts we can see that this market bounced right off the S&P 1100 number that everyone was watching closely. The VIX is the other major indicator that is gone through the roof this morning moving $3 points.

http://stockcharts.com/h-sc/ui?s=vix&p=D&b=5&g=0&id=0

As this chart shows it bounced right off of the 50 day moving average again. That creates what's called a double bottom. That is when a stock goes to one level in this case $21.22 goes back to that level and goes up. A Bullish indicator. The VIX measure volatility in the options market. It can be used as a hedge on long term positions that you own. It can also be used as a trading vehicle. As with anything once they become over bought or sold it creates opportunities to make money. In this case the Fundamentals of the Employment figure created a catalyst and the RSI on the chart does not give us a clear indication of the coming movement from yesterday. the 50 day moving average was your only guide along with the wick on the red candle yesterday indicating a reversal to the upside for the VIX.

The question always comes down to what to do? If your a long term investor you have nothing to be very concerned about since you have a long time horizon. Trading wise you have some opportunity on the VIX since there is sure to be heavy volume tomorrow.

Questions and comments are always welcomed. stockguy911@yahoo.com