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Market Commentary: What’s Next?

January 7, 2009 – 1:19 pm

  The jobs report from the government will be released on Friday but out this morning was the ADP jobs report that always comes out before the official report and it showed a drop of 693,000 jobs. This report has been consistently wrong, and sometimes significantly, but it could be wrong too low or too high; it’s not consistent. That report put a deep freeze on the market this morning sending the Dow down over 150 points at the opening.  

Everyone expects job losses just as everyone expects a painful recession with layoffs rising for months, but it is the unexpected that will cause turmoil in the stock market.  

On the plus side, volatility has been declining for almost a month and with that a calming is taking place in the market. Rational pricing of stocks should reassert itself and that means earnings and future earnings will be considered when traders buy and sell stocks. That is very positive. Now all is needed is more clarity of what those earnings are going to be. That question has yet to be answered but at least the question is being asked. 

Good Trading
Steve Peasley 

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