Support Levels to Watch

The two lows on the D-J Averages to watch are 12845.78 for the Industrials and 4672.35 for the Transports.

Yesterday's very weak job report pushed the 10-Year T-Note yield below the trough formed late last year and completed a "double top" pattern in the process. That puts bond yields at the lowest level in twenty months. That's very bullish for bond prices which rise when yields fall. But it's potentially bearish for stocks because it suggests a slowing economy and the need for more supportive Fed action. I look for a 0.5% Fed Easing at its next meeting but it will be too litle too late and we are headed for recession. Overall once we are several months down the road this will be bullish for gold stocks but I look for gold shares to be dragged down by the broad market in September-October.