Tag Archives: employment

‘Jobs’ Better Than Expected

‘Jobs’ came in at 248,000 vs. estimates of 220,000 and unemployment rate to 5.9%.  Clicking the graphic yields the MarketWatch article.

jobs

The stock market is dutifully rising to test some breakdowns, as we noted to be likely in an update for subscribers yesterday.  A key to what the market does at those test levels will be in how the market interprets the data’s effect on policy making which, as we well know, has been causal and supportive of the bull market every step of the way.

Theoretically, in a normal market we have reached escape velocity, where the economy’s fundamentals alone can carry the day.  Notice I wrote ‘normal’?  Is this a normal market?

sp500

The Fed is looking mighty suspect holding ZIRP for going on 6 years now.  Then again, as long as there are no signs of inflation they have an implied free license to keep on keepin’ on.  Interesting to say the least.

Pre Jobs Report, Market Debate Rages

I have spent some time rummaging around the internet in light of yesterday’s hard ‘up’ in the stock market.  There are intense debates going on about whether this is a ‘V’ shaped reversal as Richard Ross (a cool dude I have met previously) thinks, or a bounce prior to new lows.

My view?  New lows in February prior to a bottom that could possibly be the launch pad to new highs out around mid-year.  That is of course subject to the current bounce proving to be only that, a bounce.

I prefer to look under the hood more than to try to out guess nominal charts.  One market leader, the BKX-SPX ratio, is still intact.

bkx.spx

Another leader has been the barometer of the will to speculate as represented by the HYG (junk bonds) LQD (investment grade) ratio.  This has made a mini breakdown.

hyg.lqd

What say we let the market decide what is up next?  I have a sneaky suspicion that ‘jobs’ is going to come in okay, although the forecast as noted at MarketWatch seems to be a bit of a high bar at 190,000.

For now I am sticking with the bounce prior to a drop again in February and then rebound into mid-year scenario.  Subject to incoming data of course, beginning in 5…4…3…2…

[edit]  Lame Payrolls +113,000 vs. expected +190,000 (prev. 74,000).

payrolls

Employment Report: +74k

headline
Story from MarketWatch

So yesterday we were thinking about the long bond, right?  Well its yield tanked on the news this morning.  This is right in line with a possible contrarian play on 2014.

tyx.1

From the micro (15 min.) to the macro (monthly)…

tyx.2

I wonder if today may be the kickoff to our preferred plan for 2014.

Here’s a link to the BLS statement for anyone interested in the details.

NFTRH 264 Out Now

NFTRH 264, well rounded and well grounded financial market analysis, is out now…

nftrh264

It’s 20 pages that I think sums up the ‘mini me’ cyclical situation compared to 2000’s maxi.  We discuss risks and potentials (dependent upon time frames) to the whole ball of wax.  For instance, this is a risk to US stock market players right now from a contrary perspective…

smart.dumb

But there is so much more to a macro process that is grinding along through its time, which appears to be waning.  It is really quite interesting to write about and indeed needs to become a lifestyle for people who are serious about succeeding.  The graphic above is a short term data point.  What about the bigger cycle?

There are no predictions; just work.  You have got to be a geek with this market.

Guest Market Analysis

biiwii.com

* = external link

The Bernanke Shock  Peter Schiff  2.4.13
All is Well in Europe, Right?  Chris Ciovacco  2.4.13
Gold Reaches 155,180 Yen/oz – New Record in Yen  GoldCore  2.4.13
Europe Unfixed Again  Zero Hedge  2.4.13*
A Reluctant Bear’s Guide to the Universe  John Hussman, Ph.D.  2.4.13*
The Approaching End Game & How to Benefit From it  KWN  2.4.13*
Employment (Tweets & Further Detail)  Mike Ashton 2.4.13
Roller Coasters, Megaphones, Addictions & Comas…  TGR w/ Harry Dent  2.4.13*

More Guest Market Analysis

NFTRH Interim Update 12.7.12

Jobs came out at +146,000 as people dropped out of the labor force, retail, professional services and hospitality.  Manufacturing and construction decreased.  Also, October and November ‘jobs’ were revised downward.  So if your b/s detector is sounding, you are not alone.

But gold is getting clocked on the knee jerk and for me at least, this report keeps some doubt in my mind as to whether the FOMC will raise the inflationary ante on Wednesday.  In other words, will they simply announce that Op/Twist is ending and leave only the MBS asset purchases as they are but signal no further T bond buying due to a supposedly ‘strong’ jobs report and stocks potentially rallying for Santa?

I don’t have the answer.  They could go full inflation in monetizing MBS and Treasuries but this news makes me not want to gamble on that outcome.  I am personally content to hold a high cash level and let events play out, possibly through the FOMC, and just watch the precious metals sector’s technicals.

The risk to a high cash stance is that FOMC goes full steroidal on monetization on the 12th and the precious metals launch and don’t look back.  As noted, I hold ‘too much’ cash.  But again this is where long-term gold holdings and a few key stock positions come into play.

As I tried to point out in #215, I just do not trust Bernanke to be as readable as some people seem to think he is.  Gold stock technicals will play a role in what I do or don’t do before FOMC, but understand that policy makers are playing a game of perceptions.  Is the jobs and economic picture good?  I seriously doubt it.  Retail is doing well around the holidays.  Big surprise.  I give much more weight to manufacturing.  My contact in the semiconductor industry just yesterday reiterated “dead”, at least in the Semi equipment end of it regarding the likes of MKS, Brooks Automation, etc.

Summary

If we had seen an undeniably weak jobs report today I’d have had more confidence that the Fed would not play games and get right down to the business of inflation and potentially add straight T bond buys to the announced MBS buys.  Now I am not so sure they will not punt out to January.  The stock market may do the heavy lifting for them in the meantime.

I am not a professional Fed or economic watcher, so this is to be considered one market participant’s opinion only.

The precious metals sector may have to move forward on its own merits.  The search for a bottom continues and the technicals will tell the tale.

  • Gold support at 1690, 1625
  • Silver support at 32.50, 31, 28
  • If HUI has not yet bottomed, next support is 420.  But higher low is still open at around 400 or even lower to the 380’s.
  • HUI-Gold ratio starting to break down from bear flag.  Watch this one.  It held up yesterday, today will be important.

Patience.

[edit]  The post-jobs hit to gold served to test the 1690 support area once again.  The subsequent reversal to the upside after the US open can only be considered bullish.  I like to see multiple data points and the fact that support was tested again during a knee jerk response to a data release makes it important.

In other words, 1690 is still the key support for the short-term and it held up when it could easily have been lost.

Also, gold stocks are green again for a second day (so far) and the HUI-Gold ratio is positive again.  CoT data is due at 3:30 ET, and depending on this we will refine the narrative for a potential bottom or reduced risk environment.  The CoT has been a major fly in the ointment since HUI lost 460.  I want to see significant improvement today at 3:30.

I suppose the main point is that it is time to focus on nominal technicals, HUI-Gold ratio and CoT.  If these come together to indicate direction, it is probably wise to tune down the FOMC noise.  And I am aware that I have been making quite a racket about that lately.  :-)

I am oh so slowly adding here and there to bring down a ridiculously high cash position.  When confirmations come in and FOMC gets behind us, so much the better and I’ll look forward to an opportunity to stop micro managing the markets – and you – and save some commission costs on all the trading.

Speaking of “Knee Jerk” Reactions… HUI

Here is the 2 hour chart of HUI showing that the major gold stocks evidently did not like the Payrolls data.  That is as it should be since this is a counter-cyclical sector.  The broad stock market on the other hand is puffing up its plumage as investors buy buy BUY “in response to the news”.  Anyway, here’s Huey…

We’ll be filling in the whats, whys and where to’s in NFTRH this weekend.  For now, consider yesterday’s gap under threat of being closed.

On the big markets, I notice that old friend the Semiconductors may be providing another shorting opportunity as this “dead in the water” sector (not my words, but those of an associate who is intimate w/ the semi’s) rises with the happy pre-election data fest.

More to come in this very interesting market week, and its aftermath…