10:39 am EDT:  It looks like the Employment Situation seasonality will not hold today, as the gap did not fill and R1′s held as support, which is an early warning of a trend day up.  All the major US equity indexes are now trading above daily R3.  Next week, the ES should be able to test the 1147 January high, but without any major news until Friday, there will probably be some back and fill.  An (unlikely) close today below 1125 would negate this scenario and set up the possibility of a downwards correction instead.

The Precise Take – Will Employment Situation gains hold?

Leaders Analysis:  After a volatile reaction to the report, it is too early to tell what the leaders are saying.  However, the US Dollar Index is up, along with the EuroYen and equities.  It is unlikely that correlations that have persisted for greater than a year have broken, and it may take a day or two for them to get back in line.

Medium Term Analysis:  The move of the ES into the 1127 to 1147 January high range is good for equity longs, but there is a historical tendency for gaps on the Employment Situation report to not only be filled intraday, but also get continuation in the direction of the gap fill.  For the medium term, the report can mark interim highs and lows.  The December 2009 report precipitated a mild two day correction.  The January 2010 report precipitated a seven day consolidation that became the 2009 rally highs.  We should note that this is only a seasonality, and…

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