barely after that afternoon bull stampede where even all the bulls evidently wanted out of the markets.  This index on my mid-day post was happy as good be.. and then Tom, my trading partner in our trading room around 3:00 pm said something like "I think the correction has begun, going short".. and it was like someone pulled the drain as I watched the ES meltdown.

Tom has been calling for a sell since 2pm on Dec 1st.   After a little draw-down and sweating out what was some mounting strength he now been able to cash in on his short call as the markets have close over 1% lower from that call and the momentum is still heading in his favor.

 

Looking at the mid day post to this one you can see what that lat day sell-off did.  It left us barely above our moving average and certainly does not five us conviction of a momentum buy here.

Tomorrow hedges on the Jobs Report and the reaction to it.  Can we stay in bull area or do we fall off the edge here?

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.

The NYSE continues to put on higher new highs.. the NAZ and RUT have to put in a closing sprint here to put in the same strength here.

but it would be better if we could get today's bars up and over the previous day's.. we will watch for a potential rally into the afternoon, or some underneath broadening strength in the A/D lines to see if we can continue the bullish upside sentiment.

There continues to be improvement in the number of stocks above their 40 DMA.  Earlier this am the NYSE (Top orange) had a lower value than yesterday, that has improved during lunch an now all are in the improvement camp.

Our rally continues but one of the concerning breadth indicators the Zweig continues to fail in it confirmation.  The A/D performance is just been choppy failing to send the Zweig into its overbought status, a sign of missing market breadth.  We haven't had one of those all out days here with a closing 9:1 type A/D line that show real bullish sentiment.  It is apparent in the price action too as each new high is followed by a period of consolidation instead of follow through.

We may break out here, in which case the A/D lines should improve and get our overbought Zweig or we could just exhaust.  Either case the A/D lines need to show improvement from here on out to make me a believer in better things to come (1121).