No Stabilization in Jobless Claims...

Investors looking for some signs of stabilization in the jobless claims numbers today were deeply disappointed by yet another larger than expected number. This caused the Dow to open deep in the red and closed the day lower by 105 points. In fact, there were significant signs of buying into the bad news as the Dow closed the day way off the bottom. Looking into the Bond Yield Curve (see bond yield curve), we can see that much of that support probably came from investors rebalancing their portfolio from bonds into stocks as long term bond yields rose. Make no mistakes, the economic data's going to get much worse before the stock market can get better.

On the technical point of view, today's market action merely formed a sideways day as the trading was very much contained within yesterday's trading range and closed near yesterday's close. This means that the market is still in the danger zone I mentioned yesterday.