The circus is back in town. The caliope music echoes across the marketplace. The carnival-barkers will announce the jobs number within the hour. The consensus is for 150K jobs and an 8.1% unemployment rate. Last month was 115K so pay attention to the revision as well as the new jobs number in reference to this 115K number.
Shamefully, a cable news channel provides Chairman Greenspan a soap box to allow him to rewrite history. Greenspan created the economic mess that now exists in the markets. His low rate policy led to the housing bubble 2002-2007 ending in the October 2007 market top and now leading to the ongoing suffering years later by everyday folks. History often rhymes and these years are similar to the Florida real estate boom that ended in bust just in front of the 1929 Crash and subsequent Great Depression.
Sticking to the technicals, RTH 41.16 will continue to play a key role today. At 41.01, the RTH creates market negativity. The futures are down large currently but all bets are off until the jobs number hits. The S&P's are off about 16 points and the Dow Industrials down triple digits. The SPX 12-month MA at 1292.99 is the cliff edge. Failure at 1293 sends the markets into an extended intermediate term (think months) bear market, verifying the NYA losing the 40-week MA signaling a secular bear market already in progress. The SPX strong S/R is 1326, 1318, 1316, 1314, 1312, 1307, 1296, 1295, 1293 (12-month MA and 10/27/11 intraday high 1292.66), 1292, and the 10-month MA at 1290.30. SPX 1292-1293 is the cliff of no return, at least until QE is announced.
For the SPX starting at 1310, the bulls need to touch the 1320 handle to accelerate the upside but the futures are currently not in agreement with this direction. The bears need to push under 1299, if so, this will accelerate the downside and the SPX will test the cliff edge at 1292-1293, determining the markets fate moving forward. A move thru 1300-1319 is sideways action today.
The ISM Manufacturing Index is at 10 AM will create a market pivot point and immediately impact energy and equity markets. For the most adventurous traders, positions long or short the XLE or the energy ETF's ahead of this number is a gutsy move. Construction Spending at 10 AM provides insight into the employment and housing markets. Markets tend to be bullish in front of the full moon, which is Monday, but these seasonality indicators can obviously move into the background in light of Europe circling the drain. In a nutshell, RTH 41.16 and SPX 1292-1293 are key today.
Note Added 6/1/12 at 8:32 AM: Devastating report. Very somber. There is no economic recovery, the economy is now officially on the rocks. Payrolls are a paltry 69K with the unemployment rate at 8.2%. There needs to be 150K jobs just to support workers coming into the workforce. There are a lot of folks who cannot find jobs. The news is worse. Last month's 115K was revised downward to have only produced 77K jpbs. The news is very sad, this represents families and individuals in turmoil. Expectedly, the futures markets collapse, the S&P's are down 25, the Dow is down 200, the Nasdaq is down 50. The 10-year yield collapses lower to a 1.45 % handle. Gold experiences some buoyancy. This is epic economic history being written in real-time. Global contagion developing.
Note Added 6/1/12 at 9:04 AM: Watch the SPX 200-day MA at 1284.11.
Your history like your charting is flawed. This is nothing like the 1929 depression and doomsayers like yourself know nothing about the new economics, whether you understand it or not. Europe is in a reconstruction, the US markets are in the much needed correction everyone was hoping for. Where is your Copper indicator and your APPLE leading the markets barometer? IF AAPL was under 500 you would have pulled it from your magic hat as the barometer, but since it is strong, your forgot it? JJC? no more? Your a high percentage bear fan, and the doomsday crap was enough back in the fall. This is a healthy market correction. Period.
ReplyDelete[Troll ID 20120403]
DeleteI for one love your commentary. Very insightful. I'm surprised you haven't made it a pay for view site. Please keep up the great work and ignore the pesky trolls. Love it when you ID their IP numbers.
DeleteThanks Keystone. Another donation is coming.
J
I think this guy lost his money and hey don't get it out from our keystone :-) I used ti be in such pain too then I started to follow keystone, cured :-)) Keystone predicts direction of the markets well. Period!
DeleteKS, I made profits on VXX yesterday. Looks like it will open high. I'd like to get back in, but should I wait?
ReplyDelete- Ande
Hello Ande, you will have to make that decision. SPX minute charts are positively diverging, markets may want to experience a mini relief move. Try to hedge the VXX if you play it, since it is short the markets hedge it against an ETF or individual stock on the long side so if it goes the wrong way you can ride the other trade, then exit that trade, then add to VXX. SPX under the 12-month MA is uber bearish moving forward.
DeleteThanks KS, I took the trade and managed to get out without losing any skin. I'll wait till it drifts down before I do that again. I've tried to catch rockets before and failed. Thanks again for a good day. Would not have happened without you.
ReplyDelete- Ande