More Job Cuts, More Downside...

More employers announced job cuts in the order of tens of thousands today, painting a grim picture to tomorrow's unemployment rate number as well as the next few ones to come. This resulted in the Dow selling off over 200 points today ahead of tomorrow's Job report (see economic calendar). From the way the job cuts are coming in lately, tomorrow's unemployment rate number might not be the peak unemployment rate yet, which means that there is still more room to downside for my final capitulation scenario. On the technical front, the Dow's trading range today was completely within its trading range yesterday, making today's move more like a sideways move. However, the fact that it did turn down upon reaching its declining 30MA line, does put the odds in favor of the bears. Tomorrow's unemployment rate is going to be higher, the question is, how high can it get? The latest unemployment rate reading already beat the peak unemployment rate of the 2003 crisis. Could it beat the peak unemployment rate of the 1975 crisis of 9%? From the way the job cut announcements and the unemployment rate numbers are coming in, there just might be a chance of that happening. For now, lower is the only logical direction for the market in general.