Also, a number of technical factors are looking strong. For example, the momentum of the market isn't confirming the price declines, and the market is sending out "oversold" signals.
Catalano says that "when you have small-cap and mid-cap outperforming large," as is the case right now, "you generally don't get market crashes or significant declines during that period of time." In addition, he points out that Dow Theory argues against a crash because "industrials have made a new low, but transports aren't anywhere near a new low." Dow Theory says that a significant trend isn't confirmed until both those Dow Jones indices reach the new highs or lows. Just a few major data points are coming out next week. Auto and truck sales will be reported on Tuesday by the Department of Commerce, and for companies such as General Motors(GM Quote - Cramer on GM - Stock Picks) and Ford(F Quote - Cramer on F - Stock Picks), which are struggling to retool their operations as their stock prices sink, these numbers could be key. Collins of Fountain Hill says, "I wouldn't expect any positive sales data from the auto makers. General Motors is hitting lows not seen since the '57 Chevy was cruising around." The ADP(ADP Quote - Cramer on ADP - Stock Picks) employment index will come out on Wednesday. Then, on Thursday morning, the Department of Labor will release its monthly report on the unemployment rate, payrolls and earnings. The jobless rate, which has risen in recent months, is of special concern because of the already weak housing market. Foreclosures are already prevalent, and that usually isn't the case until after the labor market weakens, because people lose their houses after they lose their jobs. In addition, the consumer is responsible for about 70% of the U.S. economy, so if consumers begin to struggle due to job losses, the economy could take a major hit. The earnings calendar is light, with H&R Block(HRB Quote - Cramer on HRB - Stock Picks) reporting on Monday, discount chain Family Dollar(FDO Quote - Cramer on FDO - Stock Picks) and casino company Isle of Capri(ISLE Quote - Cramer on ISLE - Stock Picks) reporting Wednesday and Mesa Air(MESA Quote - Cramer on MESA - Stock Picks) on Thursday.![]() |
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