- Futures Commentary -

June 4, 2010 (FinancialWire) (Investrend Information Syndicate) (Via Brewer Futures Group) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — U.S. Equity markets are trading lower this morning after an overnight surge fizzled ahead of this morning’s employment report. The June E-mini S&P 500 is selling off sharply after the breakout above last week’s high at 1106.75 failed to attract new buyers.

The June E-mini S&P 500 was on its high early this morning as some investors began to tip their hand as to which side they were leaning toward ahead of this morning’s U.S. Non-Farm Payroll Report. Scared money apparently was in the market because the lack of follow-through to the upside following a breakout above 1106.75 triggered a sudden reversal.

The main trend on the daily chart turned up on the move through the last swing high at 1106.75 which means that buyers will be likely waiting to get long on the current weakness taking place in the market ahead of the key economic number. Often traders decide to stand aside ahead of key reports to avoid the volatility. After the wildness settles down, watch to see if investors reenter the market in the direction of the main trend.

Preliminary jobs data from the ADP Corp. and this week’s initial claims data support a rise in the number of jobs created. A Reuters poll pegged a consensus forecast of U.S. payrolls data at 513,000 jobs created in March. Some analysts are looking for an increase of 615,000 while President Obama chimed in by saying the report would show strong growth.

Speculators are supporting the stock market because of expectations that the jobs report would show the labor market stabilizing. This means that the fundamentals are getting much stronger which will bring the Fed closer to raising interest rates. Investors like the odds that the Fed will raise before the European Central Bank and the Bank of England.

The biggest concern that traders face today is the possibility that analysts overshot the jobs number. With the bar set extremely high at 513,000 new jobs created, it is possible that the actual data will fall short of expectations. If this occurs, then look for the stock market to weaken and Treasury Bonds to gain.

Source: Courtesy of Brewer Futures Group; For more information, content and/or a preferred introduction to Brewer Investment Group, LLC and/or Brewer Futures Group, LLC, contact Investrend Communications via resources@investrend.com with “Brewer” in the subject line.

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