Recession,the mixed signal.

Friday's drop in payroll jobs,shrank 17,000 in January, the first drop in 53 months.This is considered the most reliable indicator of a recession.The poor jobs data are the strongest evidence so far that the economic expansion is grinding to a halt.The economy is in recession mode.

Wall Street doesn't decide when a recession begins. That job is done by a rather obscure think tank called the National Bureau of Economic Research.

Here's how the NBER defines it: "A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales."

That's a lot to look at. Timing, as they say, is everything.
If the economy isn't slipping into a recession, it makes no sense to "stimulate" anything. Problem is, the NBER isn't exactly prompt in declaring a downturn. By its own admission, it takes six to 18 months after a recession has begun to declare that one has started. Way too long, in other words, to craft a meaningful policy response.

Based on these nasty developments -- along with soaring oil prices, crashing housing markets and gloomy consumers -- many are convinced we already are in a recession or soon will be. They include former Treasury Secretary Larry Summers, ex-Fed chief Alan Greenspan and a number of influential Wall Street investment houses.

For thee months in a row month, the Institute for Supply Management’s employment index has posted a reading below 50, which signals a contraction.The employment report is recessionary, but the manufacturing data shows expansion. "The market is highly conflicted."

Tracking Friday's Dow movement.

The morning session saw the major indices being booted down on the back of a surprisingly weak January jobs report.As usual,the pullback starts at 10:00am lasting for an-hour before it finds stability.

Stocks rallied Friday afternoon, gaining for a second session, as investors welcomed Microsoft's bid for Yahoo and more talk of a bailout for the troubled bond insurer sector.

At the closing bell,the pursuing bulls are still intact as seen by the dragonfly doji and a white body candlestick for the follow through the coming week.We are near the Main PIVOT and upon breakout,the Dow will be back on its feet in a bulls county.

The indices seems to be leaping upward from a downturn.Looks like this year February'08 which has an extra one-day to make it 29 days to form a LEAP-YEAR should augurs well for the Dow which started its 2008 index futures contract from its low point and as at 31/1/08 (MID-PIVOT-MONTH) and has peaked.

Friday's candlestick has lighted beyond the long upper shadow of Wednesday and is forming a new candlestick.