US Jobs Truly Pathetic

SUMMARY:

- A confluence of negative economic news gives stocks an old-fashioned tail kicking.
- 2% to 4% losses on the indices and a quick trip to the 200 day SMA.
- Gold surges, dollar fades versus Euro as US economic issues finally sink in.
- US jobs truly pathetic.
- China, US, European manufacturing point to a global slowdown.
- Incomes still not keeping up with inflation.
- 'No recession' say the pundits. They are wrong.
- Whose economic mess is this (other than ours of course)?
- After a 200 day SMA break, more selling but likely a pretty quick test.

Perfect storm of issues sweeps market lower.




The perfect storm was building with a confluence of negatives from around the globe. The U.S. jobs report was awful at 69K nonfarm payrolls produced. There are other details that I will discuss later that made it even more unsavory. The U.S. ISM came in well below expectations. China's PMI came in at 50.4, much lower than expected. The EU PMI came in at a three-year low at 45.1. Thank goodness for Greece and Italy who beat expectations while others missed such as Germany and France. Without them it would have been much worse. China is a known problem, Europe is a known disaster, and then we have the U.S. I will put it this way: It was not nearly as strong as some are saying. I will go into more detail later.

The news hit as you would expect. Futures fell off early in the morning on a lot of the data from the Far East. It flatlined overnight and then sold off hard on the U.S. data. The market sold down from the opening. There was a modest short covering rally attempt in the afternoon which did very little before tailing off into the close. The result was an old-fashioned tail kicking.

SP500, -2.46%; NASDAQ, -2.82%; Dow, -2.2%; SP600, -3.08%; SOX, -4.1%.

It was an ugly day no matter how you slice it. Looking at the charts, there was a significant drop that pushed the indices through their recent lows as well as the 200 day EMA. That has stocks approaching the next support already, and there will be a lot of potential support on the way down just as there is always resistance on the way up. The question is whether the news is bad enough to push stocks down significantly from here, or will they find support and base? As of Friday, no one was saying much good about the economy. There were a few out there saying there would be no recession and that this is the time to buy. It may turn out to be the time to buy, but we will see stocks telling us that is the case.

Not all stocks sold off. Not all of them collapsed. It was not a total bloodbath, but it was a significant drop for the market. It is an important drop because it takes out another consolidation attempt at relatively high levels of the pullback. It upset any ABCD pattern attempt. Now the market will have to realign itself and base out once more at a lower level from 2011.


OTHER MARKETS.

As you likely anticipated, the trends of late -- driven by the fears of late -- continued to hold. Not completely, however. There were some changes because of the dramatic change in the fortunes of the U.S. economic picture.

Dollar. 1.2430 versus 1.2368 euro. The dollar surged early. It has been running up against the euro, and you would anticipate a surge because the European data was bad. Even though the U.S. data was bad, it was not as bad as over there. The problem is that the dollar, after surging, closed lower. The reason? The Fed is back in play now. The Fed has been protesting that will not raise rates and that it is not time to do it. But all of a sudden, Friday's jobs report was somehow a game changer. Not all the other debilitating data, mind you, with respect to manufacturing, durable goods orders, etc. You saw it all. No, it has to do with jobs. A lagging indicator. They were going to wait until they saw the whites of their eyes, I guess, looking at the most lagging of indicators to make policy.

It is here. I talked about the ECRI last week, and it was looking at incomes and jobs. The jobs have arrived at that tipping point. Now the dollar is suddenly realizing that the Fed is back in play, and it might start printing some money. It might not be able to wait as the card of last resort, the last one to play in the event of trouble. So the dollar faded.


Bonds. 1.47% versus 1.57% 10 year U.S. Treasury. Even though the dollar may be worried about the Fed printing more money, bonds were not. Bonds still rocketed higher, and the 10 year hit another record. Huge moves on the week. There is money in flight to U.S. treasuries. This appears to be a secular move that, as Gary Kaminsky said, may likely push the 10 year yield down to 1%. It is getting close, and it has dropped a long way in a short period of time. The U.S. may have its troubles, but money is flying to bonds from overseas and here in the U.S.

As I said last night, this is not a sign of health as some were saying. It is a sign of major trouble, and it was forecasting more weak economic data in the U.S. Bonds are exploding to the upside. I do not see anything stopping it right now. There will be pullbacks, but the move was set up with this rally, pennant, and now an explosive gap. Not a good sign for the U.S. or the rest of the world economically.


Gold. 1,621.40, +57.20. Gold had a different story to tell. My, how fortunes have changed. It spent the last three weeks moving laterally after tapping at the upper trendline of its prior downward-pointing channel. It has formed a second smaller channel. It moved laterally, and it kept tapping lower and rebounding. We said something was up with gold, and it took off to the upside. Why? Money printing. If the Fed has to print, gold suddenly becomes much more valuable because the U.S. dollar becomes much less valuable. There is also that fear factor. The U.S. is heading into recession, and that scares investors around the world. They look to U.S. treasuries as safety because they still think the U.S. government will remain solvent for now. And they look to gold because it is a good store of value. They say you can buy a good suit with an ounce of gold now just as you could 200 years ago. Gold jumped up, and it is likely to continue higher as long as the bad news continues to gel.


Oil. 83.17, -3.36. Oil tanked. Who needs oil when you have a glut of it in the U.S. and there is no economic activity (or falling economic activity) around the world? Europe is a litany of negative manufacturing reports, contracting at a faster pace. China is not contracting yet, but it is on the cusp at 50.4. As far as it has dropped, it seems like it is already in recession.

We have no need for all this oil. We have no need for all these commodities. But interesting things are happening in commodities. Some are being bought simply as hedges and stores of value when paper assets suddenly look very risky. People were de-leveraging on Friday. That was almost a cathartic, cleansing move to the downside. It is not over. We may get a bounce because we broke the 200 day EMA and are right above other support. Often you get a rebound after that kind of action. It is not likely a rebound that will make any significant advance unless we get different stories that change the game. What would that be? You know it as well as I do: The Fed comes out with QE3 or QE4 or whatever name or number you want to pin on it. That would help pump up financial stocks. But as we know, it would not have that big of an impact this time. What happened with the other Quantitative Easing rounds? We had big moves in equities. We had a big move off of the March 2009 low. Then we had a big move off of the August 2010 low, but it was not as big as the initial move. Then we had the Operation Twist move. It made a nominal new high but could not make it stick. The move was much smaller than under QE2.

What does this mean? Each round of this money-printing stimulus has less of an impact. The marginal returns diminish. You have to have real growth at some point, and we do not have that in the United States. The recession supposedly ended in June of 2009. We have virtually no job creation and virtually no economic advance even though the recession supposedly ended. All of the stimulus came after the recession was officially declared over. It failed to do anything for us. Any advance today has been because of the Fed's massive liquidity and money printing.

We have some series troubles ahead of us. It is coming home now. It is not over. We are still in an uptrend. We may come down and tap that trend, and the Fed will announce "Quantitative Easing Whatever" and off we go again. Eventually we will not get the bounce; we will just get a rollover. We have to produce real economic growth, and we have had 3.5 years of these policies from the White House. The one thing they have proved is that Keynesian economics simply does not work. It only creates massive deficits, monetary transfers from the producers to the lotus eaters, and we suffer. Rome fell doing the same things we are doing now. Japan has entered into a multi-decade depression doing the things we are doing now. It is a grim scenario. Hopefully we will wake up before November.


TECHNICAL SUMMARY

Volume. NASDAQ -6.8%, 1.95B; NYSE +4.63%, 891M. The internals were not that impressive, but it is Friday and people were not around. That is often the case in the summer. You would have expected a lot more volume to the downside. It is almost a positive that volume did not explode higher with the indices down 2+%. With those kinds of moves, you would expect tremendous volume dumping stocks. That was not the case, so maybe there is a little silver lining there.


Breadth. NASDAQ -5:1; NYSE -6:1. Decliners were leading big. Big negatives on both of them. It may be getting a bit extreme.


New Lows. NASDAQ 1054; NYSE 209. New lows are not bad. You would expect to see 500-600 new lows to suggest that we are getting near a bottom. But that would only be an isolated stat. You have to put everything else in there as well: Call ratio, technical picture, volatility. The whole nine yards has to come together or it does not mean a lot.

The internals were not that bad. They were negative, as you might expect, but they were not horrid to the downside.


THE CHARTS

SP500. SP500 undercut the recent lows as well as the 200 day EMA. Now it is closing in on a relatively key support range around 1260. That is not too far for it to fall, and after it reaches that level, it will likely attempt a bounce to the upside. Stocks do not typically rally straight up. They have their pyramids, one on top of the other, and they sell in the same manner. There could be a big meltdown on the first move, and then a bounce, then a selloff, and then you see the little pyramids moving to the downside. After a bit more selling, we will likely get a little bounce even out of the old SP500. Relatively speaking, it is not in bad shape. It is still holding a significant portion of its rally.

Looking at the Fibonacci retracement chart, the SP500 has moved through the 50% retracement of this move off of the November 2011 low. It is still a relatively normal pullback. It is just virulent, and it is coming at a time when we have declining economic data. It is not one where we just have a normal pullback. This is pretty ugly. You could say it is leading some of the data, but really it has been following the data. That suggests that maybe it will not be a horrific selloff. Things are gloomy. I was very gloomy in the opening when discussing our economy and, indeed, the world economy. But the market itself is not showing that it is all Armageddon. But it never does, at least not right away. It has to fall into the selloff, and it is doing that right now.

We need to watch support levels. Can it hold the next support level or the one after that? How strong are the moves to the downside? Right now a 50% retracement is no big deal at all, and it has plenty of support below it. We will see if it can hold that support. We will not just think the world is over and we need to run for the hills. That is not smart. That is not the way you play the game in the stock market. You watch, you see where things hold, you watch oversold conditions, you watch leadership. Then when things get right, you make your move.


DJ30. DJ30 clearly undercut the 200 day EMA. No question of its weakness right here. It is falling toward the next support around 11900. That is one level, but it is always a range. We will look anywhere from 11735, and indeed a bit lower. We look for a hold and a bounce attempt after that. It, too, has not put in a deep test of its last move on Operation Twist, so it is still in decent shape.


NASDAQ. NASDAQ cracked its 200 day EMA as well, but it did not just blow through it. It is already approaching the next support, and it is not in bad shape. It is still coming back to test, yes, but it has very good support starting at around 2705 down to 2675. There is that range of support still below it, and it can hold and make a decent rally off of that.

Again, we cannot get overly negative and turn gloomy. You cannot get overly positive when things are moving higher either. You have to analyze what is going on. Everyone is negative right now. There was a selloff, but it was not the end of the world for the NASDAQ; it is still in its pattern. If it can hold at these next support levels or even the lows from 2011 before that eurozone selloff, it puts itself in very good shape to move higher again.


SP600. SP600 broke below the 200 day EMA. It, too, is struggling. They are all struggling. No surprise there. There is some support at 410 still to come, so it has a near support level to bump down to. Another five points lower, and then it can reverse and maybe try to bounce a bit to test. Very important, it broke through some important support levels. If it does hold or if it rolled over after another bounce, it has a considerable way to drop to roughly 390. That is a significant drop for the small caps.


SOX. The semiconductors were crushed. Down over 4%, gapping below the recent lows and selling off. Already down below the 200 day EMA, so that is not in play. The next support levels in play are a long way down near 345. It has another 8-10 points to the downside. Semiconductors do not look good. They were leading lower and, true to form, they are leading the market to the downside as the rest of the market decides to follow these commodities to the downside that are in everything we buy now.


LEADERSHIP

Leadership may not be exactly what you think.

Metals. Metals did not do too badly on the day. FCX was actually up. Looks like it is trying to bottom. MACD is coming in a bit higher as the stock tests a prior low. In steel, some of these look as if they are trying to bottom. AKS is very similar to FCX.

Retail. Retail was not doing great, but stocks such as AMZN held up just fine. Not all did as well. BWLD gapped below the 50 day EMA. That is not good. CMG is a stock that looked good on Thursday, but it gapped below the 50 day EMA as well. It is not over. It is still putting in a base, but it sure looked a lot better on Thursday. Of course a lot of stocks looked better before Friday.

Drugs. Medical stocks will probably perform better. IDIX came in nice. It is holding up very well. Then there were problems with AMGN. It imploded and broke to the downside. It is a situation where there may be a transition taking place. What should be a good sector is struggling a bit. A lot of people will turn to it in times of trouble, thought. We will look there for possibilities.

Internet. Internet continues to look decent. WWWW is holding up very well. EXPE is holding up nicely. It is holding at the 10 day EMA and not paying attention to what is going on.

There are cracks in some of the leadership groups, but we also see some of the leaders of the leadership sectors holdings up just fine. That is a positive, but overall things look to the downside. We may get a bounce soon. FCX looks like it wants to move higher. Maybe we will get a little commodities action moving to the upside because money works that way out of fear, looking for hard assets to put money into. The problem is, if there is deflation, they will not be safe harbors either. We will continue to look for stocks that are in good defensive sectors and can make us money to the upside. And we will look for stocks that look good no matter what. If they look good and are ready to bounce, we can put some money into it. Of course, you do not want to stack a lot of money into the upside on new plays because we have had such a pernicious turn to the downside. We have downside plays that are working for us.

In energy, LUFK has turned down and is really falling hard. AAP is heading to the downside. CTAS dropped hard as well. It will be that way. GRA is one of our downside stocks, and it is gapping lower just as we anticipated. BID is gapping down and selling as well.

There are stocks in trouble, and they are from many different sectors. That is no surprise looking at the downside breadth. We will continue to look for opportunity there, although gaps to the downside such as we saw on Friday do not present the best buying opportunities. That is why we move into them when we see them setting up. That will give us the gains. When you see the move, you play it. If everything looks right and it is in sync, it can make you money. Sometimes it will give you a head fake and you have to get out. We saw these setting up, and we started moving into them even when people were still talking about the stock market running higher. Look what is happening now.


THE ECONOMY

TO VIEW THE ECONOMY VIDEO CLICK THE FOLLOWING LINK:

Flash: http://investmenthouse1.com/ihmedia/f/eco/eco.html




Jobs fall short, revisions to prior months eviscerate any claim of improvement as Labor Secretary talks of the need to export more goods. Hopelessly confused in the White House.


More people looked for work but fewer found it in May, and as it turns out, in April and March as well.

Workforce: +642,000, the biggest increase since 11/07. Looked for work bout could not find it.
Participation rate: 63.8% vs 63.6% April.

Nonfarm Payrolls, May (8:30): 69K actual versus 150K expected, 77K prior (revised from 115K)
Nonfarm Private Payrolls, May (8:30): 82K actual versus 168K expected, 87K prior (revised from 130K)
Unemployment Rate, May (8:30): 8.2% actual versus 8.1% expected, 8.1% prior
Hourly Earnings, May (8:30): 0.1% actual versus 0.2% expected, 0.1% prior (revised from 0.0%)
Average Workweek, May (8:30): 34.4 actual versus 34.5 expected, 34.5 prior

April: -38K jobs from original report.
March: -11K jobs from original report.

Construction -12K; Leisure -9K
Gains: Healthcare +33K; Manufacturing +12K

Huge yet ignored stat: Average workweek FELL.


Personal Income trending lower in April and we know now it was lower in May.




ISM still positive but sliding fast, missing expectations.
ISM Index, May (10:00): 53.5 actual versus 54.0 expected, 54.8 prior



















Back to the Land of the Lotus Eaters: Cramer, JPM Asset Management: There won't be a recession. According to ECRI and the Chicago PMI, we could already be there.


Another trip to the Island of the Lotus Eaters: denial of our economic situation continues.





Prepare for another 'I was wrong' moment on the Daily Show, Cramer.

Cramer has talked up how our economy is 'strong' for several months now. It is not strong. The numbers show this is the worst recovery since the Great Depression. I detailed many of the lowlights last night. Maybe we are strong compared to pitiful Europe, but we are not strong by any comparison to US standards and frankly even European standards (the old standards pre-EU).

As Archie Bunker once told Edith on 'All in the Family,' with his continued talk of the strength of the US, Cramer has painted himself into a corner and thrown away the key.



Why? Because last week I went through the ECRI recession call and reiteration in detail. The missing link, the last holdout, was jobs. Incomes have already rolled over in real terms (see chart), and as jobs follow (a lagging indicator of course) that is only going to get worse.



Now all of the pieces are in place and ECRI says we may already be in recession given the magnitude of the decline in such a short time period. This dovetails with the conclusions the Chicago PMI author's stated following its release this week and the rapid decline it chronicled. They concluded that the US was heading into recession given the key factors watched were down three consecutive months.

You can keep a stiff upper lip and deny the numbers. It certainly looked as if the US was far from recession fears, but ECRI made the call and as the months passed and we moved toward the target dates, the data has consistently eroded despite the Administration trying everything it could to mask the true numbers. As the evidence continues to mount and the data continues to deteriorate it is clearer that resistance to the notion a recession in the US is coming is futile. It may already be here.


This economic disaster didn't start in this Administration, but this Administration has utterly failed to resolve it.


Learning the hard way that there is a reason the communist regimes fall and the socialist ones barely produce results.

Stimulus signed into law 2/17/09. Recession ended 6/09.

Sure doesn't feel as if the recession is over.

Recovery well below the average of the past 10 recoveries.

Even with the stimulus we have 15 million unemployed and no quarters of 4% or better growth.

Trends have turned back down and ECRI's recession call is about or is reality.

You own everything since June 2009 Mr. President.





THE MARKET

SENTIMENT INDICATORS

VIX: 26.66; +2.6
VXN: 28.63; +2.74
VXO: 26.21; +3.15

Put/Call Ratio (CBOE): 1.37; +0.29

Bulls versus Bears

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 39.3% versus 38.3%. Back up to the level three weeks back, seemingly an absurd reading given the market, but it has been somewhat skittish of late. Likely just a hiatus before heading back lower and toward 35% threshold for a bullish read, down from 43.0% and 41.9% a month back. This is lining up with the put/call ratio. Still over 35% (below which is considered bullish) but dropping fast. Just as the market found support to bounce the bulls ran. Off the 55+ level hit in late February. That was the highest level since April and May of 2011, the peak of the post-bear market high. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 24.5% versus 26.6%. Rather odd action in line with the bulls as bears back off from the high on this move. Still higher than the 22.3% three weeks back. Pausing, but as with the bulls, likely to run higher after this week and its action. Over 35% to is the threshold to be really be a good upside indicator. Back to the 25% to 26% level it held for weeks; we will see if it breaks through this time. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.


NASDAQ

Stats: -79.86 points (-2.82%) to close at 2747.48
Volume: 1.957B (-6.81%)

Up Volume: 78.62M (-748.45M)
Down Volume: 1.88B (+610M)

A/D and Hi/Lo: Decliners led 5.07 to 1
Previous Session: Decliners led 1.13 to 1

New Highs: 12 (-18)
New Lows: 154 (+52)


SP500/NYSE

Stats: -32.29 points (-2.46%) to close at 1278.04
NYSE Volume: 891.448M (+4.63%)

Up Volume: 346.11M (-1.694B)
Down Volume: 4.25B (+1.85B)

A/D and Hi/Lo: Decliners led 5.94 to 1
Previous Session: Decliners led 1.05 to 1

New Highs: 52 (-10)
New Lows: 209 (+30)


DJ30

Stats: -274.88 points (-2.22%) to close at 12118.57
Volume DJ30: 163M shares Friday versus 205M shares Thursday.


MONDAY

Next week the economic data does not slow down much. We have factory orders on Monday, ISM service on Tuesday, and on Wednesday we have productivity. Of course our president thinks that kills jobs, so we have to be careful of that. Productivity has been going down, hasn't it? It was -0.5 prior, and jobs have not been blasting off to the upside. Gee whiz, could they possibly be wrong? The history of the economy shows that they are. Thursday brings initial claims and consumer credit. That will be interesting as well. Then on Friday we have wholesale inventories. That will give us some more ideas as to what the U.S. manufacturing sector is doing. Trade balance will also be interesting. We will see what happens there.

We have more data, but we had the big daddy week of data this week. We see the results. It was an ugly May, and now it has been an ugly start to June. No new money came in, but maybe it will next week. We anticipate that there will be some more downside. There is this next support level for SP500, and it was dropping quickly toward that level on Friday. A little bit further to the downside, another 30 points or so, and that lets the VIX bounce a bit higher to those old lows. Then you get a rebound move.

So we get a rebound. Here is the point as to why this is even more significant than the prior attempts: These are very important levels because they are the lows from 2011 before the eurozone selloff. These where the lows after QE2 started to run its course and everyone know it would be pulled. That makes them extremely important because, if the market breaks through them, it falls well back down into the move from 2010. That makes the Fed's job that much harder, trying to rescue the market. I discussed this last night. Does it move now and try to fix it before it gets worse? Or does it want to act as the ace-in-the-hole, trying to come to the rescue as the white knight for the market and the world economy if things start to tank yet again? That is the dilemma the Fed is in, and it will probably try to keep its powder dry. It cannot go on in on this kind of news right now; it would be seen as premature.

We will probably get more of a selloff. We will get the stock market falling down to the next support. From there it will bounce, and then it likely falls again. There is no Quantitative Easing coming right now. The Fed may end up surprising everyone, but it has been making noise as if it would not do that. That will be the game changer, if the Fed decides to step in.

China is out there as well. If it announces big stimulus, that will also help the market. That will bounce things, but will it take them back up? I do not think so. If the Fed steps in, that would be a game changer, and financial assets will rally because the Fed carries a pretty big float of money. When it throws it in, we will get movement. First it will be a psychological move that will bounce it higher. It will continue. It will not be as strong as these other moves have been in the past. That will be the problem. The Fed steps in, we get a nice rally, and we take advantage of it. We take our gains in our downside if that happens, and then we throw into the upside with good names in good position to move. We make what we can, and we watch for when things start to roll. It may be another several-month run. I do not think it would be, but whatever it is, we will take it. We always take what the market gives.

Until the Fed acts, it is downside biases with a bounce off of support coming after a little bit more downside. We have to continue to play those moves now. When the Fed comes out, it is a game changer and we go upside.

I know it was a tough week out there. Just put it all in perspective, watch what is happening, act accordingly, and you will come out fine.

Have a great weekend!


Support and Resistance

NASDAQ: Closed at 2747.48

Resistance:
2754 is the October 2011 high
The 200 day SMA at 2757
2816 is the early April 2011 peak.
The 10 day EMA at 2832
2841 is the February 2011 peak
2862 is the 2007 peak
2879 is the July 2011 peak
2888 is the May 2011 peak and PRIOR post-bear market high
2900 is the March 2012 low
2910 is the recent March 2012 low
The 50 day EMA at 2924
3000 is the February 2012 post-bear market high
3026 from 10/2000 low
3042 from 5/2000 low
3090 is the mid-March interim high
3134 is the March 2012 post-bear market peak
3227 is the April 2000 intraday low
3401 is the May 2000 closing low

Support:
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range) 2723 to 2705 is the range of support at the bottom of the January to May trading range
2686 is the January 2011 closing low
2676 is the January 2010 low and the December 2011 peak
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low and NASDAQ
2593 is the November intraday high
2580 is the November 2010 closing high
2555 is the mid-August 2011 peak
2535 is the November island reversal gap point
2441 is the November 2011 low


S&P 500: Closed at 1278.04

Resistance:
The 200 day SMA at 1285
1293 is the October 2011 peak
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
The 10 day EMA at 1313
1318.51 is the May 2011 low
1332 is the early March 2011 peak
1340 is the early April 2011 peak
1344 is the February 2011 peak
The 50 day EMA at 1349
1357 is the July 2011 peak
1371 is the May 2011 peak, the post-bear market high
1378 is the February 2012 peak
1422.38 is the Post-bear market high (March 2012)
1425 from May 2008 closing highs
1433 from August 2007 closing lows
1440 from November 2007 closing lows

Support:
1275 is the January 2010 low, early January 2011 peak
1267 is the December 2011 peak
1258 is June 2011 intraday low
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high
1196 is the November 2010 consolidation peak
1178-1180 is the October 2010/November 2010 consolidation low
1158 is the November 2011 low
1131 - 1127 from August 2010 base peak.
1119 is the early August closing low
1109 is the mid-September 2010 gap up point
1101 is the August 2011 low
1099 from the mid-July interim peak
1075 is the October 2011 intraday low


Dow: Closed at 12,118.57
Resistance:
The 200 day SMA at 12,254
12,258 is the December 2011 peak
12,284 is the October 2011 peak
12,391 is the February 2011 peak
The 10 day EMA at 12,441
12,754 is the July intraday peak
The 50 day EMA at 12,764
12,876 is the May high
13,056 is the February 2012 high
13,058 from the May 2008 peak on that bounce in the selling
13,297 is the April 2012, post bear market high
13,668 from 12-2007 peak
13,692 from 6-2007 peak
14,022 from 7-07 peak

Support:
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The June low at 11,897 (closing)
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,702
11,555 is the March low
11,452 is the November 2010 peak
11,178 from November 2010
10,978 is the bottom of the November 2010 consolidation
10,750 from September 2010
10,720 is the August closing low
10,705-710 from January 2010 peak
10,694-700 from August 2010 peak


Economic Calendar

May 29 - Tuesday
Case-Shiller 20-city Price Index, March (9:00): -2.6% actual versus -2.8% expected, -3.5% prior
Consumer Confidence, May (10:00): 64.9 actual versus 69.4 expected, 68.7 prior (revised from 69.2)

May 30 - Wednesday
MBA Mortgage Index, 05/26 (7:00): -1.3% actual versus 3.8% prior
Pending Home Sales, April (10:00): -5.5% actual versus 0.6% expected, 3.8% prior (revised from 4.1%)

May 31 - Thursday
Challenger Job Cuts, May (7:30): 66.7% actual versus 11.2% prior
ADP Employment Chang, May (8:15): 133K actual versus 157K expected, 113K prior (revised from 119K)
Initial Claims, 05/26 (8:30): 383K actual versus 368K expected, 373K prior (revised from 370K)
Continuing Claims, 05/19 (8:30): 3242K actual versus 3250K expected, 3278K prior (revised from 3260K)
GDP - Second Estimate, Q1 (8:30): 1.9% actual versus 2.0% expected, 2.2% prior
GDP Deflator - Second Estimate, Q1 (8:30): 1.7% actual versus 1.5% expected, 1.5% prior
Chicago PMI, May (9:45): 52.7 actual versus 57.0 expected, 56.2 prior
Crude Inventories, 05/26 (11:00): 2.213M actual versus 0.883M prior

June 1 - Friday
Nonfarm Payrolls, May (8:30): 69K actual versus 150K expected, 77K prior (revised from 115K)
Nonfarm Private Payrolls, May (8:30): 82K actual versus 168K expected, 87K prior (revised from 130K)
Unemployment Rate, May (8:30): 8.2% actual versus 8.1% expected, 8.1% prior
Hourly Earnings, May (8:30): 0.1% actual versus 0.2% expected, 0.1% prior (revised from 0.0%)
Average Workweek, May (8:30): 34.4 actual versus 34.5 expected, 34.5 prior
Personal Income, April (8:30): 0.2% actual versus 0.3% expected, 0.4% prior
Personal Spending, April (8:30): 0.3% actual versus 0.3% expected, 0.2% prior (revised from 0.3%)
PCE Prices - Core, April (8:30): 0.1% actual versus 0.2% expected, 0.2% prior
ISM Index, May (10:00): 53.5 actual versus 54.0 expected, 54.8 prior
Construction Spending, April (10:00): 0.3% actual versus 0.5% expected, 0.3% prior (revised from 0.1%)
Auto Sales, May (14:00): 5.0M prior
Truck Sales, May (14:00): 6.0M prior


June 4 - Monday
Factory Orders, April (10:00): 0.1% expected, -1.9% prior (revised from -1.5%)

June 5 - Tuesday
ISM Services, May (10:00): 53.0 expected, 53.5 prior

June 6 - Wednesday
MBA Mortgage Index, 06/02 (7:00): -1.3% prior
Productivity-Rev., Q1 (8:30): 0.7% expected, -0.5% prior
Unit Labor Costs-Rev., Q1 (8:30): 2.3% expected, -2.0% prior
Crude Inventories, 06/02 (10:30): 2.213M prior

June 7 - Thursday
Initial Claims, 06/02 (8:30): 375K expected, 383K prior
Continuing Claims, 05/26 (8:30): 3250K expected, 3242K prior
Consumer Credit, April (15:00): $12.7B expected, $21.4B prior

June 8 - Friday
Trade Balance, April (8:30): -$49.9B expected, -$51.8B prior
Wholesale Inventories, April (10:00): 0.5% expected, 0.3% prior

By: Jon Johnson, Editor
Copyright 2012 | All Rights Reserved

Jon Johnson is the Editor of The Daily at InvestmentHouse.com

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