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Expectations For The Non-Farm Payroll Report Are Nil

ByNicholas Santiago
Published 06/01/2012, 02:13 AM
Updated 07/09/2023, 06:31 AM

Tomorrow, the United States Labor Department will report the non-farm payroll report for the month of May. The past few job reports from the Labor Department have been absolutely dreadful coming in below expectations. Economists are expecting the May non-farm payroll report to show 150,000 new jobs. This report could cause a short term positive reaction in the stocks market if it is better than expected.

Any bounce in the stock market tomorrow could be offset by the strong U.S. Dollar Index as the major stock indexes seem to simply trade inverse to the dollar. All traders should realize that every trade in this market is essentially a trade on the U.S. Dollar Index. The problems in Europe and around the world could keep the U.S. Dollar Index strong for a while. Please understand, the U.S. Dollar Index is very extended and overbought on the daily chart, therefore, it is possible to see a near term pullback in the U.S. Dollar Index. The bottom line, the U.S. Dollar is simply more important than any non-farm payroll report that will be released.

Should the markets catch a bid higher tomorrow after the non-farm payroll report traders should watch for stocks with daily chart relative strength to lead any potential rally. At this time, the best stocks that are showing daily chart relative strength include Wal Mart Stores Inc (NYSE:WMT), TJX Cos Inc (NYSE:TJX), Ross Stores Inc (NASDAQ:ROST), and Dollar Tree Inc (NASDAQ:DLTR).
WMT CHART

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