Bears are getting nervous. It seemed fairly certain we were going to finally break that 800 level on the S&P. It hasn't happened and now the street seems to be focused on things like the slowing rate of decline in China versus a 28% decline in German manufacturing. In other words looking at the "positives." Twice this week we have put together impressive rallies when the news was less than impressive. Tomorrow the job number comes out. Like always it is the reaction not the number. 855 to 860 is your bogey. If we break through that you better start getting defensive on the short book. Not saying everything is changing but it could throw a painful multi week wrinkle into portfolios that are underweight equities.
The psychology in all of this is huge. If we get a rally off a bad number tomorrow it will probably follow into a rally into a bad bank plan to be released on Monday. If we break tomorrow going into the weekend down then all of a sudden the plan on Monday could be met with more selling.
Another interesting aspect was the massive break in the Yen late in the day today. Looks like there may be some major international intervention to get the yen down before Japan disappears economically.
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