August 3rd, 2012
in Gary's blogging
Opening Market Commentary For 08-03-2012
Markets jumped up in a big way this morning when the job data was announced and according to Zerohedge, “we learned that nearly 3 times the headline print was due to seasonal and B/D adjustments and is thus nothing but noise”.
Not exactly surprising to see the markets zoom up on job data that is suspect and I also venture to guess that today's highs won't hold for long. Anytime the DOW moves up 200 points there WILL be a correction.
At 10 am the ISM came better than expected at 52.6 vs 52.0 expected and that is good, but what we need is to put folks back to work so they can buy houses. However the fly in the ointment is that the US Rate Of Employment edged up to 8.3% from 8.2% and the Hourly Earnings decrease to 0.1% from 0.2% and the underemployment went up 0.1%.
The other news as you can see from the chart below was so-so and classified as 'barely good'. I wouldn't bet on this market continuing up for long as the 'real' sitution of the US is not at all in balance with continuing poor financial reports from Europe and China.
Interesting that Leavitt feels (quote below) that this market nonsense is good for intraday trading but not so for swing trades. I agree on the sudden reversals as we had one this morning and the fact swing trades may get clobbered. But intraday trading? I disagree in that you are guessing that the market will continue, for the current session, in the direction it started. I see empirical evidence that we could have another reversal this afternoon.
The RRR** has indeed been good for a day trade, BUT, and that is the catch, you have to place your bet BEFORE the session begins. That involves guessing late in the prior session and placing your wager before the close and HOPING the next day's session goes the way you think it will. For me I remain conservative and will wait for the water to clear.
“This is all good for day trading because we’re getting plenty of intraday movement, but it’s not good for swing trading…way too many sudden reversals!
The S&P has been down 8 of the last 10 days and 15 of the last 22 yet at today’s open it’ll be up relative to two and four weeks ago. Preserve capital.
This is not a time to be aggressive. There is no clear trend, and news from Europe, which has the ability to push the market quickly in one direction or the other, is not consistent.”
The DOW at 10:15 is at 13094 up 215 or 1.67%.
The 500 is at 1389 up 24.27 or 1.78%.
The $RUT is at 766.52 up 17.95 or 2.34%.
SPY is at 139.16 up 2.51 or 1.84%.
The trend is up and the current bias is up.
WTI oil is at 97.65 trading between 87.32 and 91.68 and the bias is neutral.
Brent crude is at 108.72 trading between 105.84 and 108.94 and the bias is neutral.
Gold is up today at 1601 trading between 1586 and 1600.06 with a neutral bias.
Dr. Copper is at 3.35 up from 3.30 earlier.
Earlier the USD tumbled from 83.60 to 82.68 and recovered to 82.79.
As can be seen below, courtesy of Table A9 from the Household Survey, in July the number of part-time jobs added was 31K, bringing the total to 27,925, just shy of the all time record of 28,038. Full time jobs? Down 228,000 to 114,345, lower than the February full-time jobs print of 114,408.
Once again, more and more Americans are relinquishing any and all benefits associated with Full Time Jobs benefits, and instead are agreeing on a job. Any job.
Even if it means working just 1 hour a week. For the BLS it doesn't matter - 1 hour of work a week still qualifies you as a Part-Time worker.
** RRR = Risk Reward Ratio
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Written by Gary