Pre-Market:

As of 8:00 AM this morning, futures are very slightly up with down overnight markets across the globe. I can envision a slope upward in the market this AM for the first 30 minutes, followed by a tail down for the rest of the day. I don’t see any positive momentum in the market now. And I believe there is an unemployment report tomorrow, and the consensus range is 9.9% to 10.1%. The 10% number is purely psychological, everyone knows we are going to hit it, but it’s psychological nevertheless. Just like the DOW 10,000, Gold at 1,000, that number has a profound impact on our subtle market actions. Even if the unemployment number surprises positively, then we could have a good finish on the week, but I’m not sure how far forward that impetus would carry us. If it surprises negatively, I could see a big ugly sell-off tomorrow.

Yesterday, on FOMC day, the DOW closed up only .31 %. The DOW ranged 9928-9767 for the day (+1.65%). It’s not what I would call a whipsaw day, but just an ugly double top day artificially propped by some media speculation. This was a great opportunity day for the DOW to turn itself around and it didn’t. I would be more cautious going forward.

The broader indices actually looked more ugly, with NASDAQ down .9% and S&P up only .10%

The bottom line — if you bought and held yesterday, you would have been lucky to show any gains at the end of a very much media hyped day. This has pretty much been the daily story for the last month. We have had a disappointing October earnings season. It started off with a bang and went out with a whimper. This is despite mostly positive earnings reports all month long. My forecast of a great October didn’t materialize. Any amount of media hype is not sustaining this market.

I could go into detail about the McClellan Oscillators, but suffice it to say they don’t look encouraging either.

My Candle Pattern Index shows 12 bearish sessions since the top on 10/19; It’s still bearish, though a little less bearish than the day before. More importantly, a very large number of patterns are awaiting breakout – either up or down. It’s still possible that we could turn up from here, although my gut feel doesn’t support that thesis.

I can easily see the current rally attempt failing and the DOW falling another 3% or so to 9500.

On a more positive front, yesterday I bought the EEB ETF (emerging BRIC), and DBO (double crude oil), to play current trends. EEB is an IRA play, and DBO is a short-term oil (and weak dollar) play. I also covered my short on DTG for small loss.

Good luck today.