Michael A. Doran

Friday's unemployment numbers are being watched closely by investors and unless surprising strength in the labor market emerges, it could bring the stock market back from September's heady run. Pressure has become broad-based, such that all 10 major sectors in the broader market are now in the red.

A weaker-than-expected jobs reports may put a damper on the recent stock-market rally. We'll be closely watching the last hour of trading Friday to see if recent technical indicators that point to a continuation of the rally are correct.

The market appears to be shifting from a more bearish to possible bullish scenario, after an impressive rally back above the lows of the major market plunges in early May. We'll be looking for an encouraging sign that institutional investors are bringing more cash inflows into the market.

Next week begins some early earnings announcements, when a clearer picture will emerge for making decisions on increasing short exposure or long exposure in the market. We believe the technical damage done in recent weeks may require some more time to mend, and that would be normal and expected during this phase of a market cycle.

There's no way to accurately predict the direction of the stock market -- it's best to let the actual price and volume provide the clues. For now, it appears the line of least resistance is down from here, though we are expecting a brief attempt to stabilize and rally in the near-term.

The stock market's inability to be inspired by the financial sector's strength makes it uncertain whether stocks will log their fifth straight loss, which would make for the stock market's longest losing streak of 2010.

Recent stock market gains remain random, with no firm market indicators currently pointing in the direction of a strong rally. So far, Mike says, this rally feels like it's of the "pushing-a-rope" variety.

The ferocity of the recent Wall Street sell-off caught many by surprise, and may be a signal that the market is moving into a more bearish phase. Michael warns self-directed investors to tread cautiously.

The market remains vulnerable to the possibility of a deeper retracement of the rally than any that has occurred to date prior to higher highs taking place.