3/11/2007 10:51:29 PM

The anticipated Friday employment report turned out to be a non-event, after all the dust settled. The number came in at 97,000 -- close to the consensus forecast - and the market initially rallied in goldilocks mode, but it gave it back. The Dow was basically flat (up 15 points), and the NASDAQ and S&P were both flat.

The Dow gained 162 points on the week, the NASDAQ + 19 points, the S&P + 15 points, all on low volume - which tends to make that very small upward bias for the week suspect (especially considering the massive volume we saw in the sell-off).

As analysts sifted through the Friday job numbers, their interpretation turned from positive to neutral/negative. For example, the rise in jobs was the smallest in over two years. Plus, the lower unemployment rating we keep hearing the administration bragging about isn't an accurate comparison to past periods, since it reflects a much lower labor force than earlier periods - many potential job seekers have simply given up or have just been "reclassified" to non-labor force humans so they are no longer considered part of the job pool. Many market watchers have been crying foul at this ongoing seeming data manipulation and the false impression it gives about economic health.

Also in the numbers and of concern is a large decline in factory jobs and evidence of wage inflation.

We can expect volatility in the week ahead as the markets wait for some kind of catalyst to nudge it in either direction. I continue to have a bearish bias and think we will see more selling pressure. As far as upcoming data we should keep an eye on: The CPI, PPI and Fed meeting.

As always, please email me with any questions, suggestions or comments: dynamictrading@stockbarometer.com.