Roller Coaster

This week so far has been a little roller coaster with an up day followed by a down day, which was followed by an up day.

The moves have been fairly contained during this Holiday shortened week, and I would not read too much into these market swings.

Since the Wall Street mavens support a quarter to quarter mentality, it’s not surprising to see the focus on the S&P;’s +15.2% gain during the past 90 days. This, of course, does not tell the entire story.

Year-to-date, the index is up a scant +1.81%. All of the gains for the past quarter resulted from left over momentum from the March low rebound and happened within the first 5 weeks. Since May 6, the market in essence vacillated aimlessly and gained absolutely nothing.

In other words, the quarter started out with a bang and ended with a whimper, which makes me question the sustainability of the move.

While the rebound was strong enough to generate buy signals for our international and domestic Trend Tracking Indexes (TTIs), there has not been much follow through to the upside, which means we have not gone anywhere with our positions. As I have repeatedly said, a new catalyst is needed to provide the impetus for further gains.

Today, a day earlier than usual, the employment report will be published with a June loss of 498,000 jobs to be expected. Anything substantially less will very likely be greeted with a rally, while a worse figure could cause the markets to sell off.