Major averages finished lower on higher volume yesterday though managed to claw back losses to finish in the top half of their respective trading ranges after finding intraday support near their August price range lows.
The data-important monthly jobs report is due out tomorrow at 8:30 a.m. EDT. A strong report may push the Fed closer to a rate hike, though they are fully aware of the global economic situation, so their hands remain tied.
While it is expected the markets would fall on a strong report, they may do the opposite as the crowd is often fooled. Instead, markets may interpret a strong report as further confirmation that the economy is indeed on the mend. While these numbers are clearly manipulated, what is more important is perception, as that often guides institutional (big) money flow which in turn creates the trends. So whether or not the report comes in strong or weak, the price/volume action of leading stocks is key. As always, keep a close eye on your stocks. Let them guide you on how to manage your portfolio exposure to the market.
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