Pre Jobs Report, Market Debate Rages

I have spent some time rummaging around the internet in light of yesterday’s hard ‘up’ in the stock market.  There are intense debates going on about whether this is a ‘V’ shaped reversal as Richard Ross (a cool dude I have met previously) thinks, or a bounce prior to new lows.

My view?  New lows in February prior to a bottom that could possibly be the launch pad to new highs out around mid-year.  That is of course subject to the current bounce proving to be only that, a bounce.

I prefer to look under the hood more than to try to out guess nominal charts.  One market leader, the BKX-SPX ratio, is still intact.

Another leader has been the barometer of the will to speculate as represented by the HYG (junk bonds) LQD (investment grade) ratio.  This has made a mini breakdown.

What say we let the market decide what is up next?  I have a sneaky suspicion that ‘jobs’ is going to come in okay, although the forecast as noted at MarketWatch seems to be a bit of a high bar at 190,000.

For now I am sticking with the bounce prior to a drop again in February and then rebound into mid-year scenario.  Subject to incoming data of course, beginning in 5…4…3…2…

[edit]  Lame Payrolls +113,000 vs. expected +190,000 (prev. 74,000).