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Unemployment rate steady at 5.8%

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Stock futures have extended their overnight session losses and it wasn't necessarily due to Intel's (NASDAQ:INTC) mid-quarter update, or President Bush's speech last night, which carried a resolve statement that the United States is losing its patience with Saddam Hussein.

When I went to bed last night at 01:30 AM EST, S&P futures (sp03h) 811.20 -1.28% were flat with their settlement value of 821.80. While S&P futures had been drifting lower as my head hit the pillow, they've extended losses from the 816 level after the latest employment data released this morning showed a loss of 308,000 jobs outside the farm sector in February versus a 20,000 gain expected, according to the Labor Department.

The unemployment rate rose to 5.8% from 5.7% in January.

The impact of military reservists leaving their jobs for duty may also have impacted this report, officials said.

I won't go into great detail regarding President Bush's speech, but for those wishing to review a word for word transcript along with the question and answer portion from world reporters, you can visit the Whitehouse's web page at this link. http://www.whitehouse.gov/news/releases/2003/03/20030306-8.html

Shares of Intel (NASDAQ:INTC) $16.70 are extending yesterday's after-hours losses and are this morning's most actively traded stock at $15.88. As mentioned in last night's Index Trader Wrap at OptionInvestor.com, I listened in on the call and didn't hear any real surprises from Intel, or institutional analyst's on the call. There just didn't seem to be enough "good news" to really get investors excited. The chipmaker said it expects quarterly sales of $6.6 billion to $6.8 billion. The company had previously predicted sales would be between $6.5 billion and $7 billion.

Treasuries are seeing a strong round of buying as their session has begun. The March 5-year Treasury futures contract (fv03h) $114'315 +0.29% has gapped to a contract high and has YIELD ($FVX.X) plunging below October's 52-week and multi-year low of 2.533%. With this being a shorter-dated bond and "safer" bond compared to the 10-year and 30-year, this morning's move looks very defensive. The 10-year March futures contract (ty03h) $117'195 +0.34% is gaining 13/32, with the benchmark bond's YIELD ($TNX.X) falling to 3.595% as it begins to challenge the October low YIELD of 3.559%.

As mentioned earlier, stock futures are falling to their lows of the session. S&P futures (sp03h) are currently down 10.7 points at 811.10. NASDAQ futures (nd03h) are falling 15 points at 969.50, while Dow futures (dj02h) are lower by 95 points at 7,580.

Trader's should note that the Dow futures of 7,580 indicate a cash open for the Dow Industrials (INDU) at our WEEKLY S2 level of support. This was a bear's WEEKLY "MAX target" and I'd be looking to lock in some gains on full bearish positions (1/4 or 1/2, especially on near-term March options). More aggressive bear's could bring a stop down to the DAILY S1 of 7,629. Index traders using the pivot analysis matrix could take note of these levels, DAILY S1 for example, and apply them to the indexes they may be trading. It might also be worth of review that the bearish vertical count for the Dow Diamonds (AMEX:DIA) $76.87 has been $75.00, which would be a Dow equivalent of 7,500. The S&P 100 Index (OEX.X) 416.49 point and figure chart's bearish vertical count has been 390. In October, both the DIA and the OEX pegged there bearish vertical counts, then reversed higher in the October-December rally. While these bearish vertical counts can always be exceed, or never met, they are often used by institutions for assessment of risk and may be "accumulation points" for institutional buying. As such, traders like you and I may look to lock in some bearish gains on positions held when these bearish objectives are near.

Fair value for the S&P 500 today is $-0.12. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.86 and set for program selling at $-1.65. Fair value for the NASDAQ-100 today is $0.70.

Jeff Bailey

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