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November 5, 2009 – 10:21 am

This morning we had a couple economic statistics that are pushing the market higher. The ADP jobs report released this morning, a few days before the official government report that will be out on Friday, showed a loss of jobs in line with the experts’ expectations. Historically, the ADP report has been very unreliable compared to the government statistics. The discrepancies have been wide. However, in recent months they have gotten a lot closer to the official number. The good news is that there were no surprises and they reduced the number of job losses last month. I think the details gave the market comfort. The number of announced layoffs are down and have been so for several months in a row. The other piece of news was on the economy which is still on a slow recovery path.

We have had a 5% correction in the market indexes so far. That is the absolute minimum needed to shake out our overbought situation. The traders and investors are expecting the FED to leave rates alone as they meet today and  they think the jobs report this Friday will be market neutral. If there are more job losses than expected the market will fall more, if less the rally will continue. A deeper correction in stock prices would be better for the overall health of the market but it does not have to happen. Buy slowly, and ease into the market; just don’t overpay for any stock.

It’s all about jobs this week.

Good Trading
Steve Peasley

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