Here’s Why the Market Dropped

Everyday we look for clues that might tell us where the market is headed. Yesterday we got one.

PRE-OPEN MARKET COMMENTS FRIDAY - The market has been compressing in a horizontal range for a month. The upward momentum has been waning and I thought the chances for an upside breakout were greater than the chances for a drop. Buyers have been supporting this move higher and that is why we have not seen any dips. The jobs report had the potential to be a catalyst and we have been selling out of the money bullish put spreads on strong stocks in anticipation that the market could rally after the news. The employment numbers have been good all week. This morning we learned that 303K jobs were created in March and that is better than the 200K that were projected. Hourly wages rose .3% and that was also in line. No one was worried about the jobs report. It has been exceeding expectations for over a year and it was not the cause for the decline.

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