What the Jobs Report Means for Trading

The first week of every month brings the hallowed jobs number.  This is a great opportunity for news junkies put on their analyst cap on and political junkies to put their partisan cap on (or just leave it on).  The question traders want to know is, what the heck does it mean for the markets.

The immediate reaction of traders this morning has been to sell.  Here is the opening chart for the S&P 500:

It doesn’t take a rocket scientist to interpret this as negative.  Below is our pattern recognition analysis of days where the Employment Situation data was released and the S&P 500 futures gap down 0.3% or more.  The blue lines represent different theoretical curves for the dominant patterns the market has followed in the past.  Will the market follow these historical patterns today.  No guarantees.  But this should give you a better roadmap than the insta-analysis you’ll be hearing all morning.  Hint: hold off on buy orders off the open.

Warning: This report was generated using very generic criteria.  In the report I run for myself based on our proprietary analytics the afternoon session is much weaker.  Be careful out there.

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