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You’ve seen baseball players do it. It’s the bottom of the ninth inning and their team is losing. To spark a comeback, they turn their hats inside-out and sport the rally cap.
Perhaps investors looking for a big upward surge after a week of down trading, got their rally Friday, as the market exploded higher on better than expected jobs data. But like the baseball player’s hats, the inside-out nature of the markets is worth a second look.
With no August action from the FOMC and the ECB failing to lay out concrete plans to support Mario Draghi’s statements, the market headed south all week. The impetus for recent rallies had NOT been good economic data or positive earnings, but the rumors or speculation of immediate Central Bank action.
So now we get a little bit of positive news, and the market explodes higher. But perhaps this is really a blip on the radar.
Just ask out friends at Zero Hedge, who are also baffled by recent market action.
http://www.zerohedge.com/news/baffle-bs-continues-non-manufacturing-ism-better-expected-employment-drops-lowest-2011
The strategy to keep everyone utterly confused and merely chasing momentum and trends continues. After the surge in the morning's NFP report, driven entirely by statistical fudging and part-time jobs, which has sent the market higher by well over 1%, we next get a Services ISM update for July according to which the US non-manufacturing sector improved modestly, to 52.6, on expectations of an unchanged print at 52.1, making the case for NEW QE even more distant. But wait; just to keep everyone totally baffled with BS, the ISM says that the employment index dipped below 50 for the first time since 2011, printing at 49.3 from 52.3. In other words, the employment in the US services sector is now contracting, something which the NFP number roundly denied. Confusion? Mutual exclusivity? It doesn't matter to algos, who are confident that the Fed will certainly launch more QE with the S&P at 2012 highs no matter what the facts say. Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.
larrylevin@tradingadvantage.com
Trading Advantage
(888) 755-3846  |  Larry Levin's Trading Advantage is a leading investment education firm that empowers traders to achieve and surpass their financial goals. More than 50,000 students have used Larry Levin's proven techniques for powerful results. |
Trading Signals from the Electronic (ES) mini-SP 500 - No “Secrets” trades signaled today.
- Algorithm positions (4)
- “Reading the Tape” positions (0)…combined Secret’s, Algo, & “Reading the Tape” total… -1.00
Click Here to See Yesterday's Detailed Results
ES 1388.75 / 1383.25
POC... 1388.00
YM 13064 / 13018
NQ 2677.00 / 2665.00
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Keep a civil tongue.