Here is an argument I keep hearing.

Historically, this has been a poor strategy off which to trade.  Often times, the market bottoms well before the bulk of the job losses occur.  Let's look at the past six recessions.

The 1969-1970 Recession
Begin Recession - December 1969
Beginning of downward trend in NFPs - May 1970
Bottom of the market - May 26, 1970
Successful re-test - July 7, 1970
Jobs lost before market bottom - 8,000 net jobs gained
Jobs lost after market bottom - 1.0 million
Peak date of jobs lost - October 1970
Number of jobs lost at peak date - 430,000
Return one year after bottom +44%

The recession began in December 1969 and ended November 1970.  The S&P 500 bottomed on May 26, 1970.  The trend in nonfarm payrolls (NFPs) turned negative in September 1969, but 8,000 jobs were created over the eight months through to April 1970.  Starting in May - the month the market bottomed - NFPs declined 1 million over the next eight months.  Thus, all of the net decline in jobs occurred after the bottom.  The market retested the low on July 7.  The inflection point in jobs - the month with most amount of jobs lost - was in October when NFPs declined 430,000.  Thus, the bottom and the re-test occurred both before the bulk of job losses occurred and the inflection point.  The market was up 44% a year after the market bottomed.

The 1973-1975 Recession
Begin Recession - November 1973
Beginning of downward trend in NFPs - August 1974
Bottom of the market - October 6, 1974
Successful re-test - December 9, 1974
Jobs lost before market bottom - 20,000
Jobs lost after market bottom - 2.2 million
Peak date of jobs lost - December 1974
Number of jobs lost at peak date - 602,000
Return one year after bottom +39%

The recession in 1973 began in November and ended in March 1975.  The S&P 500 bottomed on October 6, 1974 and successfully re-tested the lows on December 9, 1974.  Jobs started declining in August 1974, with 20,000 jobs lost in the two months before the market bottom.  Over the next seven months, the economy shedded 2.2 million jobs.  The peak in job losses was in December, as 602,000 jobs were lost.  Thus, the market bottomed before most of the job losses occurred and successfully re-tested at the peak in job losses.  The market was up 39% a year after the market bottomed.

The 1980 Recession
Begin Recession - January 1980
Beginning of downward trend in NFPs - April 1980
Bottom of the market - March 27, 1980
Successful re-test - April 21, 1980
Jobs lost before market bottom - 0
Jobs lost after market bottom - 968,000
Peak date of jobs lost  - May 1980
Number of jobs lost at peak date - 431,000
Return one year after bottom +37%

The recession began in January 1980 and ended in July of that year.  The S&P 500 bottomed on March 27, 1980 and successfully re-tested a month later on April 21, 1980.  Jobs started to decline in April and over the next four months, the economy lost 968,000 jobs.  The peak in jobs lost was May 1980 when 431,000 jobs disappeared.  The market bottomed a month before NFPs turned negative and re-tested a month before the peak in job losses.  The return a year after the market bottomed was 37%.

The 1981-1982 Recession
Begin Recession - July 1981
Beginning of downward trend in NFPs - August 1981
Bottom of the market - August 9, 1982
Successful re-test - No retest
Jobs lost before market bottom - 2.1 million
Jobs lost after market bottom - 754,000
Peak date of jobs lost  - July 1982
Number of jobs lost at peak date - 343,000
Return one year after bottom +57%

The economy slipped back into recession in July 1981, staying there until November 1982.  The economy had been in recession in 20 of the previous 35 months.  This time, the market bottomed deep into the recession, hitting the low on August 9, 1982.  By August, 2.1 million jobs had been lost.  The market rebounded hard off the bottom, rising 57% over the next year and did so a month after the worst month for jobs lost.  Unlike the other recessions mentioned, there was no re-test.

The 1990-1991 Recession
Begin Recession - July 1990
Beginning of downward trend in NFPs - July 1990
Bottom of the market - October 11, 1990
Successful re-test - January 14, 1991
Jobs lost before market bottom - 335,000
Jobs lost after market bottom - 1.3 million
Peak date of jobs lost  - February 1991
Number of jobs lost at peak date - 300,000
Return one year after bottom +30%

The 1990-91 recession began in July 1990 and ended in March of the following year.  The market bottomed in October 1990, three months after NFPs started declining.  A total of 335,000 jobs were lost before the bottom whereas NFPs declined by 1.3 million over the next seven months.  The worst month was February 1991 when the economy shed 300,000 jobs.  The market bottomed three months before the peak in job losses and rose 30% over the next 12 months.

The 2001 Recession
Begin Recession - March 2001
Beginning of downward trend in NFPs - March 2001
Bottom of the market - October 10, 2002
Successful re-test - March 12, 2003
Jobs lost before market bottom - 2.3 million
Jobs lost after market bottom - 383,000
Peak date of jobs lost  - October 2001
Number of jobs lost at peak date - 325,000
Return one year after bottom +35%

The 2000 recession was similar to the 1982 recession as most of the job losses occurred before the market bottom.  In fact, the bottom of the market was the furthest away from the beginning of the job declines and the peak in losses as the employment situation turned downward 19 months beforehand while the peak was 13 months before the low.  The S&P 500 was up 35% after it bottomed.

The 2007-? Recession
Begin Recession - December 2007
Beginning of downward trend in NFPs - January 2008
Bottom of the market - ?
Successful re-test - ?
Jobs lost before market bottom - 4.4 million and counting
Jobs lost after market bottom - ?
Peak date of jobs lost  - ? (December 2008 so far)
Number of jobs lost at peak date - ? (681,000 in December 2008)
Return one year after bottom ?

Of the seven prior recessions, this has been the worst in terms of absolute job losses, as 4.4 million jobs have been lost to date.  The average return off from the lows in the six previous recessions has been 40%.  If March 6 was indeed the bottom at 666, we would expect the market to be at 935 within a year.

Conclusion
As we have seen, the market often but not always bottoms before most of the job losses occur.  Almost certainly, this recession will see the majority of the job declines before the market bottom, as occurred in 1982 and 2002.  However, every single bottom in the market was followed by more job losses.  And waiting for a peak in job declines is no help as sometimes the peak in job losses occurs before the bottom and sometimes after.  The successful re-test of the market is usually closer to the peak in job losses, but it occurred two months before the peak NFP declines in 1970, a month before in 1971 and 19 months after in 2003.  Thus, the jobs number is no indication of a bottom in the market.