MORNING THOUGHTS

The markets reaction to the weak job numbers has been pretty good as most expect the fed will not raise rates this month. The question most should be asking is when does the bad economic news turn to not so good news for stocks.

My guess is that its not today's business but keep it on the radar screen. Also, if the feds main job is to fight inflation, how happy are they with the higher wage numbers in todays report?

The markets opened near the highs and have sold off since. Market internals are bullish with 2,400 more winners than losers although they were also much better near the open. Best sectors - internets, brokers, homies, retail, semis and financials. Oils are lower and drugs and biotechs are flat. Small caps opened near their highs and have sold down fairly hard and are close to the flat level. A tell?

I have a sell signal in SPY (2 day RSI 90) and have sold all that I hold in a short term trading account and now have the largest QQQQ short that I have had in quite awhile.

The oils are looking interesting here as the OIH has lost several points from the 150 level earlier in the weekl. Any shot of a new storm developing over the weekend to drive the price of crude higher?

Volatility indexes are lower but not quite at the oversold level of 10% below the 10 day SMA so I have no desire to enter a SPY short.