Update your bookmarks! Anomalous Material has moved

www.anomalousmaterial.com

Feel free to browse older post here although they are all available on the new website

Still working on moving the blog away to its own host and domain. I hope to be up and running by the end of the week.

As expected, the market is bouncing back with a solid trend day today. We are nearing an area of potential resistance so watch for clues as to whether we will continue the short-term downtrend or break out to new highs once again.

Tomorrow: no significant econ data or earnings

There has been a good deal of downright disappointing economic data the last couple weeks and Friday's job data is more cause for concerns for the bulls. Manufacturing data in particular has been awful increasing doubts that the US consumer is bouncing back. This upcoming week officially launches Q3 earnings with Alcoa on Wednesday. Needless to say that a disappointing earning season would be the nail on the coffin for the V-recovery hopefuls.

However, after last week's technical damage, expect some type of bounce and consolidation and watch out for another potential bear trap (the third). Key level to watch will be the SPY 104 area which could become a potential resistance. To the downside, given how fast the market has gone up, there isn't many potential support until SPY 100 which will be key to sustain this rally intermediate term. (Shorter timeframe charts here)

Some exciting times ahead both in terms of day-trading and longer-term trading. As always, risk management is key as many bears can tell you the last 6 months.

Economic Calendar:

• Monday: ISM Non-manufacturing PMI (50.0)
• Thursday: Unemployment claims (543K), Wholesale inventories (-0.9%)
  
• Friday: Trade balance (-32.7B)
  

Earnings Calendar:

• Wednesday: AA, COST, MON

Weekend Reading:

• Fund managers bracing for a sell-off (Business Week)
• Feds creating a new bubble (Washington Post)
• Day traders return to the market LOL (BBC News)
• Consumers' new frugality (Nielsen)
• How profitable are HFT strategies? (Finalternatives)
• A look inside the job's data (Calculated Risk)
• Bad trading day lessons (SMB)
  

Just a couple charts of the SPY for the road: The non-farm number came out much worse than expected causing a big gap down. After witnessing a trend day yesterday, there was some pretty good chances we wouldn't see a major distribution day again today. The market drifted sideways and higher for most of the day and made for some exciting plays off the open on failed breakdowns. Expect the market to retrace some of the losses incurred this week. Levels to watch should be quite familiar with the SPY 104 area as 50% fib retracement in short-term downtrends. It looks more and more likely that we will go and test SPY 100 fairly soon. Check back this weekend for more in-depth analysis and a look at next week.

Today: Non-farm Employment change (-263K vs -179K), Unemployment rate (9.8% vs 9.8%), Factory orders (-0.8% vs 0.2%)