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Let's just say that if the Dow Jones Industrial Average on Thursday closes down 200 points, we'll call it a moral victory. The Dow Wednesday closed down 166.75 points to 11,215.75.

"What was that famous Bette Davis line about a bumpy night? Well, Thursday could be a bumpy day," economist Peter Dawson told BloggingStocks Wednesday.

Thursday could be very bumpy for the stock market because a series of data points -- all expected to be negative -- are converging at a traditionally difficult time of the year for the market - the start of summer.

Three data points of significance

First up is the European Central Bank's interest rate decision at 7:45 a.m. EDT, at which the bank is expected to increase its key, short-term interest rate, the refinance rate, by a quarter-point to 4.25%. The ECB is trying to check inflation, Dawson said, but it may end up hurting the dollar. If the markets believe the already-weak dollar will fall further, that will increase commodity prices, including oil, "which will not be good news for stocks," he said.

Second is U.S. Labor Department's June employment report. Economists surveyed by Bloomberg News expect the economy to have shed 50,000 jobs in June, and if the number is above 70,000, that, too, will weigh on the markets, Dawson said.

"If you assume a margin of error for revisions, a job loss above 70,000 in June will mean six straight months of job losses, and over 350,000 jobs lost since employment peaked in December [2007]," Dawson said. "Six consecutive months of sub-par jobs data will take a great deal of steam out of those predicting an economic recovery by the fall, which will hurt stocks."

Finally, there's the start of a major summer holiday weekend. Dawson is a strong supporter / citizen of the United States and loves the 4th of July, but he knows what trading days are like ahead a long weekend, in the summer, during down economic times. "They're generally not too pretty. You have typical end-of-the-week selling, combined with lighter volume, negative sentiment, all added to institutions closing out positions at the summer's start... It could turn out to be a difficult day for the market, to say the least," Dawson said.

Market Analysis: Economist Dawson did not mention that key technical indicators for the DJIA also are bearish, with the Dow well below its 50-day and 200-day moving averages. One positive: the Dow does have psychological support at the 11,000 level. Here's hoping it can hold it.



[Note: The line Dawson referred to was actress Davis, as Margo Channing in the 1950 motion picture "All About Eve," saying, "Fasten your seatbelts, it's going to be a bumpy night."]