Yesterday gave some investors hope but today's 4.25% drop in the S&P 500 produced some reality. The market can't see a bottom but it certainly feels like investors may throw the towel in soon. As we said at the beginning of the week, everybody is focused on tomorrow's employment report. Another bad number could be the recipe for capitulation and the market could have an intraday drop of greater than 5%. If this occurs with heavy volume, it will be time to buy stocks and wait for an ensuing rally.
Every day brings limited good news and mostly bad news. The markets have left investors numb and frustrated. It is clear the economy is not turning around any time soon but another 5-10% drop in the market could finally put us at a point where all that bad news is discounted. Stay tuned for tomorrow's unemployment report.
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