We have been watching all week as the 52 week highs indictors were saying "buy" and the 10 day high-low indicator was confirming underlying strength in addition the Russell was starting to gain ground and the 40% DMA index climbed back up out of the bear zone things were looking pretty bullish. We did get at 2.5% rally for the nimble but two days in a row of no follow through price action and today's late day sell-off have kept that pesty Zweig in this neutral zone of noise. The missing ingredient (besides the financials) has been the failure of the A/D lines to build up any momentum.
A breakout from here will be difficult. We did not loose all the underlying breadth however so there will be most likely some push back from the bulls unless everyone wants to get out at the same time.
The jobless numbers tomorrow seem to be pre-doomed. A good number (lower %) will strengthen the dollar and we know what that does to the market. A weaker number (high % unemployment) will weaken the recovery story putting the forecasted earnings in question.
I will be playing it close and quick until an obvious trend re-develops in the markets in this sideways choppy market.
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