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| | | Jobs Part 2 | | | Friday’s NFP number (non-Farm Payroll) report was better than expected. At 171,000, it was better than even the highest estimate by economists…by a wide margin.
Some economists thought that hurricane Sandy would negatively impact the NFP results, but they were wrong. The Bureau of Labor Statistics (BLS) had finished gathering its data before the storm struck. It will surely, however, impact the next reading on employment.
From the BLS we read, September 2012 Employment Report.
Total nonfarm payroll employment increased by 171,000 in October, and the unemployment rate was essentially unchanged at 7.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and business services, health care, and retail trade.
Since it takes about 130,000 new jobs per month to keep up with population growth, this was a good data point. But you may be wondering how the unemployment rate went up if the amount of jobs created were better than 130k? That would be because the amount of workers actively seeking a job increased last month.
One may also be wondering: If the jobs data were much better than expected, why was the stock market crushed Friday? Nobody can know the exact reason but I believe it was because the market exploded before the data were known, Thursday. A came, but it was a day early.
So the market’s reaction the day before the NFP and the day of the NFP report was interesting, but should be nothing compared to the reaction of the market from the election. Tuesday and Wednesday should be interesting. | | 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. | | | | | | | | | |  | | | | 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. | | | | | |  | | | | Congratulations to Andy Lafontaine
Andy LaFontaine: Pretty slow day for me, only +5 on the ES, 24t on euro
"I have been here for a long time and Trading Advantage never stops amazing me! I have become very close with a number of students and TA employees. I am extremely happy with the direction your organization is going and am very glad to be a part of it! Charlie Moon is certainly one of my favorites!" | | | | | | NOTICE: Testimonials are believed to be true based on the representations of the persons providing the testimonials, but facts stated in testimonials have not been independently audited or verified. Nor has there been any attempt to determine whether any testimonials are representative of the experiences of all persons using the methods described herein or to compare the experiences of the persons giving the testimonials after the testimonials were given. The average reader should not necessarily expect the same or similar results. Past performance is not necessarily indicative of future results. No person was compensated for providing a testimonial. | | | |  | | |  | | | | Volatility Commentary | | | Head Fakes Everywhere In the three trading days this week, $VIX moved up 4.4%, down 10.3%, & up 5.4%. These head fakes in the VIX coincided with increase fluctuation in the S&P500 Index.
Today, the S&P500 Index started off higher in the morning but bumped up against the 20-day & 50-day moving averages at 1434 and dropped throughout the day to close down -0.94% to 1414.20. Technically speaking, this confirms that the Index is currently in the midst of a downward correction.
Likewise, despite the collapse of VIX yesterday, VIX remains in an uptrend. Be very careful of these head fakes in prices or indices.
| | |  | | | | Currency Spotlight | | | | Canadian data may be deteriorating, but the loonie may remain strong as their southern neighbor, the United States posted a strong jobs report and improving demand for factory orders. The relationship between Canada and the U.S. is rather simple and unique. The two countries have the world’s largest trading relationship. If the U.S. economy is strong, Canadian economy will benefit with increased demand for its oil, natural gas, electricity, uranium and continued investment of U.S. dollars into Canadian businesses. Throughout the financial turmoil and European Debt Crisis over the past five years, the Canadian economy is the strongest out of the other G7 countries. Despite Friday’s disappointing Canadian employment report, only 1.8K jobs were created (expectations were closer to 10k) and comments last month from Mr. Carney that the Bank of Canada is becoming dovish; Canada is still the envy of most countries. Tighter housing rules and recent weakness in oil may support further short-term weakness with the loonie. Since the domestic fundamentals are still strong for Canada, traders might start considering buying the Canadian dollar sooner than later.
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|  | | | | Watch List | | | The market started the day positive, but quickly turned negative early on in the trading session. Now it had held and was bouncing back and forth, essentially staying sideways until the early afternoon where a hard sell off occurred. Once it got settled it went sideways again, until we sold off into the close.
The NASDAQ especially got hit hard with a sell off of AAPL and it seems the retail investors are taking their profits and running. I hear about these talking heads on TV saying what a great buying opportunity it is on AAPL, and all the while I have seen it go to 650.00, then 625.00, then 600.00!! Now AAPL is down to 576.00 and I sit and wonder "Do you still feel its a great buying opportunity??". All the while people are looking to buy and are getting HAMMERED, they are losing twice in my eyes. Not only are they losing their shirts, pants, and whatever other article of clothing you want to include, they are MISSING out on the chance to make a great deal of money SELLING AAPL!. Simple lesson to all of this folks is don't think too much. Trust when the technicals show a strong trend in a stock. Read and react with your trades, not what you THINK may happen.
The market should be a bit quiet on Monday and Tuesday due to the elections, but the day after it should be a crazy volatile ride. If you are risk adverse it might be time to sit on your hands and watch, because the market will have more ups and downs then a roller coaster. Protect your profits and anticipate wild swings. I suggest shorten the time frame of your positions and walk away with money when you can. You may never know when the market will reverse with a fury of a runaway elephant. Open Position: CHKP Stocks to Watch: AAPL NFLX GMCR GS BAC C AMZN IBM | | |  | | | | Futures Data | | | ES 1425.25 / 1410.25 POC… 1420.25 YM 13161 / 13045 NQ 2683.75 / 2659.75
Notes from the Pit
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