This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

The Jobs-Report Black Box: It's Game On

The Jobs-Report Black Box: It's Game On The report may have been in a sweet spot: positive enough to justify a more bullish call, but not hot enough to stop QE3.

A small secret worth sharing: I operate in the financial Twilight Zone as a rogue agent who must do battle with many formidable, ever-changing foes. Time is a foe: You pen an opinion at 8 a.m. EDT and it stands to be utter rubbish by the session open. You make a stock call on Feb. 6, 2012, and it's sucked into a Google (GOOG) loop, never to disappear. You miss a sliver of daily trading action, and the ensuing few weeks could make you appear dumb.

Luckily I am mentally tough as nails -- 'cause, lemme tell ya, it's fierce out there. One of the most difficult things for me has always emerged on jobs-report Fridays. On Thursday night XYZ seems valid -- yet, after the employment figures, the view has become completely off-base, or far enough from the mark to prompt one to head back to the drawing board. So, henceforth, on each jobs-report Friday there will be a "Black Box" column -- a chronicled collection of before and after thoughts on the market and its direction.

Before: Negative on the market, but finding encouraging indicators.

Date: Thursday, Nov. 1, 2012 11 p.m.

  • The feeling in the market is that, once we are beyond the U.S. presidential election, stocks will enjoy expansion in their price-to-earnings multiples, to be followed by upgraded earnings estimates. Those very weak corporate new-order rates will no longer be an issue. Arkansas Best (ABFS) said it has slashed tractor replacements by 8% due to economic conditions? This decision will be reversed inside a day.
  • Hold those horses. Nowhere is it written that any of this "uncertainty" will be wiped clean with a run to the ballot boxes, nor that enough "uncertainty" is deemed positive certainty to the extent the market wants it to be. After all, Europe, pending a solar-system upheaval, is still with us in present form.

  • The market loved the Institute for Supply Management manufacturing index. It was a supposed euphoric read on the economy and a potential recovery. Instead, I say it showed weakness in machinery, transportation equipment and electrical equipment -- the goods required to build a fallen economic pyramid. I think the ISM report actually supported the negative tone of earnings season, from results to guidance.

Here's some fun new evidence, finally, that the market is oversold. There were at least four things that caught my eye on Thursday, most of which were clues sniffed out from the market's post-Hurricane Sandy session.

  1. Steel stocks reacted positively to China news, reversing course starkly from the sympathy decline Wednesday due to U.S. Steel's (X) earnings -- the China purchasing managers index joins forces with U.S. Steel's shift in tone on pricing dynamics near the end of the quarter.
  2. Cummins (CMI) built on Wednesday's session, though the company's earnings were not gangbusters by any stretch of the imagination.
  3. There are perceived earnings season winners in Eaton (ETN) and DineEquity (DIN), shares of which have exhibited follow-through.
  4. Wal-Mart (WMT) ceded ground on an outside chance that consumers will visit more discretionary retailers for the holiday. I do caution, however, that the stock could have been smacked around from Target's (TGT) merely adequate month of sales.

The After: October Jobs Report, Flash

So, what will transpire between now and Election Day is intense dissection of the October employment report. In fact, you may lay eyes on a ton of new statistics and comparisons that have been designed to drive home a point. The real deal is that it's a bunch of word-and-number plays on the foundational aspects of the data set. I think the bedrock of the report lends validity to the more positive attributes of the market, delineated above, so it's OK for you to buy stock off your watch list. If one essentially becomes constructive on the market into an election, that will bring certainty (one particular guy gets elected) and a potential win-win scenario regarding the fiscal cliff. It's time to roll the dice, stud.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
DOW 16,563.43 -316.93 -1.88%
S&P 500 1,932.70 -37.37 -1.90%
NASDAQ 4,374.4780 -88.4240 -1.98%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs