(By Rich Bieglmeier) It was a Yosemite Sam day for stocks on hump-day. The Dow went this a way and the NASDAQ that a away while the S&P played the part of a spectator. What an odd day.
Thanks to Apple (AAPL) getting flushed, the NASDAQ lost 0.77% while the Dow gained 0.64%. The S&P had an uneventful trading session adding 0.16%. What an odd day.
Apple investors got spooked by a DigiTimes article that projected a sharp drop in component orders by AAPL. Concerns that Apple might lose out in sales to Nokia in China also played a part in the street's pet stock getting bruised. Of course, the iFruit fanatics on Wall Street say "there is nothing to worry about." Don't you know that iPhone 5 is going to save the economy? Just ask Morgan Stanley.
If the superhero stock that's going to save the world crashes, then what does that mean for mere mortal equities?
Based on what iStock sees on its chart, the NASDAQ is perched right on support. If the current floor doesn't hold, the trap door opens, and it is aaaaaaahhhhhh all the way to the mid-November low, potentially.
Despite the Dow and S&P holding out on Wednesday, it's important to remember that the NASDAQ initiated the post-election correction (that sounds way too close to a potential Pfizer ad). The index moved first and the fastest to lower levels; eventually the Dow and S&P followed along like Mary's Little Lambs.
In all likelihood, Friday's Employment Situation Report with hold the key to the trap door. If numbers are better than tamped down expectations, then the door might creek, but remained shut. If not, aaaaaaahhhhhh! We'll have more thoughts regarding the Employment report tomorrow morning.
Today, we will get another taste of the J-O-B-S picture with initial claims. Since the election, or Sandy depending on your politics, jobless claims have been in the uncomfortable range of 400,000. No storm excuses today folks. Economists pegged 380K for Thursday morning's report. In our view, the number is more likely to be 390K or 370k. Prior to the storm/election, results fluctuated between the two guardrails. We tend to think the 390K version is the right one, but would be happy to see a 370k announcement.
Yesterday, the NASDAQ went that away and ended up below its 200-day moving average, and its fate rests on support. The next two days of jobs numbers are likely to determine if it says under the long-term buy/sell technical trend line or regains its footing. Investors need to watch which direction index goes as the other are sure to follow.