The S&P Futures were up yesterday, but closed lower at the end of the day. So it is giving another try today to see if the market could reverse its downward trend and start a bear rally.
However, while the market surged this morning, the ADP payroll reduction report has definitely hit the market hard, with almost a straight decline in the first one hour of trading.
This shows the market is still very sensitive to any news that may offer a gloomy outlook of the current crisis.
Unfortunately, the reality is, the crisis does not seems to come to an end very soon.
Be very cautious in the current market seems to be an advise that everyone is getting, and something that I would definitely agree with. It is difficult to tell when would the decline be stopped, nor when would the market start to recover.
In a very short term though, I do see a likely bounce back from the current lows.
The market is likely to take a break as the reporting of Q4 financials quiet down, and be ready for another round of reports coming up for Q1 2009, which will start as early as May.
Meanwhile, governments are likely to make use of the short gap of time that they have to boost the confidence a little, by offering some even more promising pictures.
One thing not to be ignored, though, is that GM and the other automakers are running out of time in submit a viable plan to continue their survival. If they are unable to somehow prove themselves could remain alive, the market may face yet another huge blow.
Until then, I would hope for the bulls, but in a very cautious manner.