The stock market rally lasted only 30 minutes following the employment report. Now the stock indexes have reverted to the underlying downward trend. In his book "Trading Day By Day", Chick Goslin says that if an established trend exists, the fundamentals news will tend to have only a short-term impact. Perhaps this is because many traders, like with today's stock market index futures, will sell the rallies, seeking to establish better positions, reinforce existing ones, or enter new trades in a clear trend.In perhaps the most surprising move today, the Dollar has strengthened appreciably, probably because the rate increase by Jean-Claude Trichet (the ECB) was already priced into the market, so there was no true surprise this morning. Crude oil, after approaching $146/barrel this morning, sold off on the strength of the Dollar's rise. This probably contributed to the stock market rally. However, as the price of oil has begun to rally again, stocks have also plunged.
What a wild ride today.
