Initial jobless claims from the US have never been so closely watched before. A massive spike in numbers and record jump are expected, as American are suffering heavy impact from coronavirus pandemic. Estimates currently range from 1 million to 4 millions news claims for the weekending March 21. These forecasts are more academic than anything because there is just no way to gauge the impact so far.
Additionally, today’s number might not be very representative. On the one hand, it could just be the tip of the iceberg with claims capped by how quickly they’re processed. A huge number isn’t more disastrous neither as the claims could be somewhat “front-loaded”. We won’t probably know the real picture after getting at least 4 to 6 weeks of data.
While DOW extends the corrective recovery form 18213.65 this week, it’s starting to feel heavy ahead of 38.2% retracement of 29658.57 to 18213.65 at 22551.11. We’d maintain the view that current rebound is, at best, just the second leg of the three wave corrective pattern from 29568.57. The strength of the rebound could reveal how deep the correction would turn out to be, eventually.