The Day Before

by Larry Levin

Well, it's getting monotonous but it's true: there was more bad news this morning. The last three days have been nearly identical. Each morning brought bad news before the open that caused the futures to trade lower only to rally as soon as the day session started. Today was no exception. Overall the market was nervous since it is the day before the monthly jobs data.

Before today's open AT&T announced it is laying off 12,000 employees. Nokia also cut its outlook for the second time in a month and warned it may lose market share.

However, it wasn't all bad news this morning. The weekly initial jobless claims surprised economists (as usual) but this time by being better than expected. The number of workers filing for state unemployment benefits fell by 21,000 to a seasonally adjusted 509,000 for the week ending Nov. 29. This is the smallest number of initial jobless claims since the week ended Nov. 1. Claims have dropped for two straight weeks after hitting a 16-year high of 543,000.

After that, however, the four-week moving average of new claims was a downer. This indicator smoothes out distortions caused by one-time events such as holidays and weather and rose by 6,250 to 524,500, the highest in 16 years.

Retail sales data also put pressure on stocks early. Retailers delivered the biggest drop in monthly sales in over three decades, an echo of their dismal October performance, as nervous consumers were pinched by the recessionary economy.

Although Black Friday was better than last year, that couldn't make up for the rest of the month. Analysts said this holiday season may shake out to be a retailers' nightmare, with their worst combined November and December on record.

All of this may be moot if tomorrow's jobs data is better than expected.


Previous Day's Trading Room Results:

Trade Date: 12/4/08

E-Mini S&P Trades*
(before fees and commissions):

1) VA sell @ 8:35am at 862.00 = b/e (1 lot)

2) VA buy @ 9:15am at 862.00 = +.75 (1 lot)

3) Engf buy @ 9:55am at 870.00 = -2.25 (1 lot)

4) OTF buy @ 10:30am at 867.00 = -1.75 (1 lot)

5) TP sell @ 11:45am at 865.00 = +1.75 (1 lot)

6) Engf sell @ 1:10pm at 867.00 = +3.50 (1 lot)

7) Algorithm positions (2)...combined daily total...-1.75

ZB (30 Year Bond) Trades*
(before fees and commissions):


1) No trades today.



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