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Stocks Rebound After Job Loss Surprise

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The U.S. stock market was sharply lower this morning. The Dow Jones Industrial Average was down almost 300 points at its worst levels. The November non-farm payrolls report came in much worse than expected. Analysts were looking for the report to unveil a loss of 340,000 jobs. Job losses came in at 553,000 for the month of November. This was the worst one-month loss in 34 years. Unemployment rose to 6.7%, the worst reading in 15 years.

The last couple of hours have seen a nice rebound in the market. All three of the major stock indices are bouncing from their Monday lows. Financial stocks are doing well. The banking indices are up 2% while the broker-dealer index is up 4%. The best sector performers are airlines (+5.4%) and insurance (+7.2%).

Here's a quick glance at what's moving on the OptionInvestor.com play list:

AXYS - We have been stopped out of AXYS. The stock gapped open lower under short-term technical support at its 10-dma and then plunged to its 40-dma before bouncing back. This move follows yesterday's failed rally and bull-trap pattern.

CHL - China Mobil is out performing with a 2.9% gain. The stock was quick to rebound today and shares are currently trading near their highs for the month over $48.00.

COST - Wholesale retailer COST is also out performing. The stock is up 2.6% and trying to break out past its 50-dma. The stock almost hit our target at $54.85 this afternoon.

ETR - Utility stocks were hard hit this morning and ETR broke down under support at the $80.00 mark and hit our stop loss. The stock has currently bounced back to $81.57 but remains negative for the day.

FXI - The Chinese market iShares is out performing today. FXI is up 4.1% and trying to breakout over its 50-dma. The stock has been stair stepping higher the last few hours.

At this time the DJIA, S&P 500, NASDAQ and Russell smallcap indices have all turned positive on the session with the NASDAQ leading the way.

Have a good weekend,

James Brown

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