October Surprise, NFP Down To 7.8%

Opening Market Commentary For 10-05-2012

Premarket numbers jumped upwards on the news of the NFP falling but the volume wasn’t there. But before you get excited, the markets move up is comparable to the opening one yesterday. Up yes, but not earthshaking in importance.

The highly rated and anticipated U.S. UNEMPLOYMENT RATE (SEP) fell to an unexpected 7.8% versus the 8.2% expected with 8.1% being the prior figure.

“BLS revisions last week DEFINITELY played a role in this” says one pundit. Personally, I can hardly wait for the revision back up.

Opening volume remains low to anemic which means in simple terms no one is trading on what first appears to be good news. In fact, by 10:00 the averages have remained at the opening levels without pushing higher. The October surprise has landed, just wait for the November surprise; the crooks in Chicago Land will do anything I think.

Do I believe that now the unemployment rate has been lowered dramatically, the FED will curtail QE 3 infinity? Not a chance in Hell as the Keynesian’s want to spend even more money, because to them, their ‘plan’ is obviously working.

The U.S. change in NONFARM PAYROLLS (SEP) came in at 114K versus the 115K expected. Embarrassingly, but not surprising, the prior BLS number was revised to 142K from 96K.

RT @DavidJSong: “Looks as though new workers are entering the labor force as discouraged workers leave. That’s the lowest Unemployment read since January of 2009. . “

“Today’s jobs report is modestly on the positive side”, says Sheraz Mian. He goes on to say, From the market’s perspective, the report is not materially different from what we have been seeing in recent months, though it does carry a few positive internals.  Today’s jobs report is modestly on the positive side, though payroll gains have by all means been underwhelming in recent months.

@zerohedge:

There was a time when only fringe blogs and digital dickweeds would suggest the BLS data was anything but entirely above board. That time has ended!

Jack Welch @jack_welch

“Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers.”

10 reactions to Jack Welch’s ‘Chicago guys’ jobs conspiracy tweet

RT @theanalyst_hk: Anyone who says BLS is making numbers up has no idea that China’s unemployment rate stays at 4.x% forever.

@zerohedge:

Reason For Today’s Unemployment Rate Plunge: Part-Time Jobs For Economic Reasons Surge Most Since QE1 Announcement

We already noted the absolutely stunning surge in reported Household Survey jobs which “added” 873,000 jobs, or the most since 2003 and the second most in the past decade, which was just a little bit off the Household Survey used in the monthly NFP jobs changes, which came at 114,000, or about 8 times less.

But what was the reason for this epic jump in Household survey jobs? Simple, and those who have read our series on America’s transition to a part-time worker society know the answer.

The reason is that the number of part-time people employed for economic reasons soared by 582,000 to 8,613,000, the most since October 2011, and the largest one month jump since February 2009, when “restoring” confidence in the economy was all the rage… and just before the Fed announced the full blown QE1 in March of 2009. Odd symmetry.

The RRR** surprisingly was very narrow, again, at the opening bell and I feel any trades will probably end up on the unprofitable side as long as this market has low volume and remains flat. Swing trading is at your own risk and being the market is at a crossroads of sorts, I would prefer to sit on my hands rather than risk guessing incorrectly.

The DOW at 10:15 is at 13657 up 82 or 0.60%.

The 500 is at 1470 up 8.84 or 0.60%.

The $RUT is at 851.33 up 6.78 or 0.80%.

SPY is at 147.10 up 0.98 or 0.67%.

The longer trend is up, the past week’s trend is neutral and the current bias is up.

WTI oil is down today and is at 90.17 trading between 91.65 and 90.05 and the bias is negative.

Brent crude is even today and is at 111.74 trading between 113.00 and 111.50 and the bias is negative.

Gold is down today at 1785.48, trading between 1795.84 and 1772.50 with a negative bias.

Dr. Copper is at 3.80 down from 3.81 earlier.

The US dollar fell from 79.53 earlier to 79.22 and is currently trading at 79.23.

** RRR = Risk Reward Ratio

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Written by Gary