The market was expecting 9.8% unemployment and a job loss of 50,000 to 150,000. If the data reported no more than 100k jobs lost, the market probably would not have moved much. If the data was greater than 100k jobs lost, than there was a higher probability of a sell off. The released data showed unemployment stable at 9.7% and only 36,000 jobs lost instead of the expected 50k to 150k. The data also reported temporary employment and hours worked increased.
The released data could be perceived as a relief for the markets of an economy in transition from recession to recovery is finally beginning to show stronger legs. However the U-6 rate of unemployment did increase from 16.5% to 16.8%.
We now believe the resistance level of 1100 to 1108 (basis March) has now become a strong support level. There is a high probability the market will retest the highs made on 1/15/10 of 1147.25 very soon. As we noted on 3/4/10, our next price goal is 1145 to 1168. Major resistance in the 1220 area.
In the immediate future, the next level of resistance is 1137 to 1143. If this level is broken, the next level of resistance is 1146 to 1150.
The next leg of support for the market would be 1132 to 1128. If the selling persists the next level of support would be 1125 to 1120.