An Ignoble Experiment: Celebration Nation

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Celebration Nation

In the end, I guess we are all just looking for a reason to celebrate. An easy way to do that is to set ridiculously low expectations. For example take Friday’s jobs number, once the low ball targets were toppled, then it was time to pop the corks and blow the horns.

Of course we all know that any jobs data needs analysis. While everyone was focusing on the quantitative component of today's BLS number, it appears what was once again missed in all the noise was the mention of the qualitative aspects of the BLS report: those parts which actually look at the quality of new jobs, not only their earnings power, but also taking productivity and labor demand into the picture. It is here that we find this month's biggest BLS report weakness.

According to Zero Hedge:

It is when one considers that there were 135,474,000 full time Establishment Survey employees in April (rising by the much trumpeted 165,000), all of which worked on average 34.4 hours (down from 34.6 in March) according to the BLS. Multiply these together and one gets 4,660,305,600 total hours worked weekly in April, a drop of 21,385,800 million hours from the 4,681,691,400 total hours worked each week in March.

Then apply the average hourly wages of $23.83 in March and $23.87 in April, and the total weekly wages paid out in March ($111.565 billion) compared to April ($111.231 billion) amounted to a drop of $323.2 million on a weekly basis.

Had the average weekly hours stayed flat as expected, this number should have been an increaseof $323.5 million or a $646.8 million swing!

In other words, the US economy added 165,000 jobs and yet US businesses paid $323.2 million lessin total wage compensation: only the second time there was a decline in the gross total monthly wages paid in 2013.

But we don’t want to be party poopers, so let’s just celebrate the S&P 500 topping the big, round number for the first time ever!

So what if the S&P 500 first jumped above 1500 in March 2000 at the height of the tech bubble. And who cares that it’s taken 13 years, one month and 11 days for the index to jump a mere 100 points.
The best part of this party is that even though it got a bump from today’s jobs number, it’s the Central Bank’s that are footing the bill.

Trade well and follow the trend, not the perma-bull OR perma-bear “experts.”

---Larry Levin

Congratulations to Rebecca Webb

The Student of The Day today is Rebecca Webb who had a great day in Larry Levin's Level II Market Profile Signal Room. Rebecca is a star pupil here at Trading Advantage and does a great job applying Patrick Assalone's Market Profile Strategy!!! Today was a strong example of her discipline and ability to enjoy the "trader's lifestyle!" Let's hear it from her:

09:43 am Rebecca Webb: $80 in NQ and $10 in CL. I'm done for the day. It's Friday!!!

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.

Congratulations to Ed Moya

The Educator of The Day today is Ed Moya in and out of the London Calling Forex Signal Room. Ed's TV spot went very well and his analysis how NFP will react was spot on! He also informed his students how USDJPY will react if we were to get a strong number and sure enough... Peter Prince was able to take full advantage! Below are his comments:

07:34 am Peter Prince: Thanks for the commentary on the Yen, plus 52 and out!
10:08 am Peter Prince: great day Ed, gotta go!

Ed tries not to make official recommendations during fast moving markets, because most of the new students would not be able to take advantage of these signals. The seasoned students, like Peter, are able to take full advantage!!!

Today we had 5 signals, a couple got closed out at even and we had 2 winners and one small loser. +$500

OPTIONS: Volatility Commentary	---Steven Lee / Michael Shorr

The big news of the day was US Non-Farm Payrolls this morning. The BLS reported that the labor force increased by 165k jobs. The consensus was only for an increase of 145k. On top of that March's number was revised upward from 88k to 138k. The unemployment rate ticked down just a bit to 7.5%. ISM Non-Manufacturing Index came out at 53.1 versus and expectation of 54.0. Last month's figure was 54.4. It should be noted that anything greater than 50 still denotes expansion. Keep an eye on China. The Yuan made all-new highs against the US Dollar. It is still pegged to the Dollar by the government, but recent manufacturing data has been relatively weak. Some action by the Chinese government could come sooner than later. The UK has shown some strength. The services sector, which composes almost 75% of the economy, grew at the highest rate in eight months.

We are in the middle of earnings season. That does not mean earnings plays are the only trades available to us. Today we are concerning ourselves with the home builder Toll Brothers (TOL). From the technical analysis side, TOL made a very significant move to try and break out of the bearish trend it has been in all this year. It broke through the upper bound of the trend line and then failed miserably. This is a very bearish signal to us. From the fundamental side, the stock had every opportunity to run up after today's optimistic employment report. It did not. Also, taking a look at the Treasury ETF, TLT, that was down over 2.3% today. This has an inverse relationship to interest rates meaning that rates are perhaps starting bullish pattern. That is not good for home builders who depend on people to get affordable financing to purchase new homes. All these reasons factored into generating a signal for a bearish directional play.

FOREX: Currency Spotlight

---Ed Moya

Negative interest rate speculation may trigger some Swiss franc weakness over the next several weeks leading up to the June 20^th Swiss National Bank monetary policy decision.

In an interview with Zentralschweiz over the weekend, SNB Vice President Jean-Pierre Danthine said, “We find ourselves in a situation in which the franc is still highly valued, and we can’t allow a tightening of monetary conditions.” The primary exchange rate that the central bank is concerned about is EURCHF. It has been almost 2 years since the SNB set the cap rate at 1.20.

The franc, similar to the yen, has appreciated tremendously during the global financial crisis and the strong exchange rate is crippling their economy. Economic growth for the year is expected to be a modest 1-1.5%, but downside risks may return if the eurozone has further political uncertainty.

With low inflation and further action expected by the SNB, traders may look to see EURCHF rise and should continue to expect the SNB defend the 1.20 level.

STOCKS: Watch List

---Charles Moon

Once again on a Friday in 2013 we finished in positive territory. This time we broke the 15,000 mark in the Dow, and closed above 1600.00 in the S&P 500. Closing the week with a bang as all time highs were hit in both markets, the push was fueled by a better then expected nonfarm jobs report. While we have finished in negative territory on Monday's in 2013, we might buck the trend coming into this Monday. Look to the early morning trading to see if we have a pullback off of these highs. If not then anticipate the market going higher.

High Frequency Trading(HFT) has been a big topic as of late, ever since the hacked AP tweet caused the markets to drop in a frenzy. This is leading to questions as to what real advantage these programs have over even Institutional traders. We are seeing more reliance on algorithmic programs, as opposed to pure fundamental analysis. While granted these programs offer up a great deal of liquidity to the market, let us be very clear if it is beneficial in anyway. Truth is they throw "dummy" orders in and then pull these order to cause a fast slide or pop in stocks. They will also play both sides back and for fast profits, and will look to essentially run over anyone that tries the get in their way. They have the algorithms tied to prominent technical levels, and also have it react to headline news, hence the huge and incredibly fast slide when the AP tweet came out. How is this fair to retail trader you may ask? It is not fair what so ever to the retail trader, as it is virtually impossible for any human to react fast enough against the algorithms. Play the momentum in your favor as opposed to try and fight the machine. It will be a losing battle every time and it will lead to a very painful and frustrating experience.

While I expect Monday's action to have a correction, I can see this market continuing higher this week. The momentum from the revised job numbers and the nonfarm payroll numbers can extend for quite sometime. I believe the only thing that can stop these bull markets, is the ending of Quantitive Easing. Until then the buying while nver end, and any drop in the market is a momentary pause in the never ending bull run. Position: COH Stocks to Watch: INTC AAPL GOOG IBM AMZN PCLN BBRY FB CTXS BAC C GS JPM CMI CAT NFLX WDC GE LULU LNKD DIS KORS COH FOSL X QCOM STZ NKE UA CHKP JNPR POT GMCR HLF HOG LOW HD LEN TOL V MA AXP DFS LVS MGM

FUTURES: Technical Data

ES 1613.00 / 1608.50 POC… 1610.75 YM 14942 / 14910 NQ 2944.00 / 2937.50	NOTES FROM THE PIT Click Here To Read

COMMODITIES: Play of the Day	---Patrick Assalone

While June Crude Oil climbed over 2.8% this week and gained 1.7% on Friday alone, we were able to find trading signal opportunities from both the long and short side. Going in to next week, we continue to look for long entries as demand has been guiding the oil market’s direction and intensity. Click here to watch

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