Stock Market Update -Jun 8th

In my blog post last week I said 'We could see the market continue to reverse the recent rally from the March 17th lows if we get a bad jobs number on Friday.' Well, guess what? We got a bad Jobs number, and the market reversed -big time!! Also the Unemployment rate shot up to 5.5%, while Oil rocketed up to over $138 on Friday. Expect more downside action in stocks -looks like a classic ABC pattern unfolding (see chart).


On Thursday we had the biggest one-day move up in oil prices in history. Then on Friday oil prices doubled that move! Maybe this will be a blow off top in oil prices for now? If you are interested in trading these crazy moves in oil prices take a look at USO.

Next week we get the CPI report on Friday -probably more bad news on inflation; we'll see how the market reacts. Be sure to protect your ASSets; if this market continues with a new down-leg as projected above it could get ugly (remember the slide from October to March).

Also avoid the financial stocks -they have not bottomed, despite what the 'experts' are saying. I think we are actually beginning to see Part 2 of the Credit Crisis starting to unfold! (more charts)

News stories:
S&P slashes bank, broker ratings on loan loss fears
Stocks slide on more concerns about financials
Busy Week On Tap After Oil Surges, Stocks Crumble
Stocks fall sharply on surge in oil, jobs data
On a Disastrous Jobs Number, Recession is Obvious
GM closing 4 truck and SUV plants in North America

Lenders slash prices on foreclosed houses as numbers surge
Now lenders are facing HELOC hell
California Housing: Buy One Home, Get One Free! Really!
Subprime Debacle May Spark 2-Year Credit Crisis
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.