Friday, September 6, 2013

Jobs…Jobs…Jobs (September 2013)

Chart from CNN/Money at…

ECONOMY ADDED 169,000 JOBS VS 180,000 FORECAST (Bloomberg)
“Payrolls in the U.S. climbed less than projected in August after smaller gains the prior two months...The unemployment rate unexpectedly fell as more people left the labor force…Unemployment dropped to 7.3 percent, the lowest since December 2008…“Job growth will remain less than desirable until we see the pace of economic activity pick up,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report…”  Full story at…

Futures were up after the report as the FED-Taper-Ghouls liked the tepid growth.  Bad news is good news if you don’t want the “taper”.

JULY JOBS REVISED DOWN 76,000 TO ONLY 104,000 (Zerohedge)
“…what has shocked the market is the revision to the July jobs number from 162K to only 104K, resulting in a net drop of 74K jobs, and breaking the average 2013 jobs gain of 200K which previously was said by the Fed to be the key threshold level for tapering. The question now is: is this print bad enough to delay the taper?” From Zero Hedge at…

The market will need to chew on this for a while: Next month the August numbers could be revised down too, as were June and July. 

Excerpts from Gallop Report: “Gallup's unadjusted unemployment rate for the U.S. workforce was 8.7% in August, up from 7.8% in July and from 8.1% in August 2012…The increase is partly due to the decline in the size of the workforce…[The officially reported] decline in unemployment masks a lack of job growth, and makes the employment situation appear to be improving when in fact little has changed.” Analysis at…

Friday, the S&P finished unchanged at 1655 (rounded) at the close.
(The Index fell about 0.75% in the last hour of trading.  Looks like traders didn’t want to be long over the weekend, but this follows a pattern of selling at the end of the day so perhaps the traders are trying to tell us the market is not healthy?)

VIX was up 0.5% to 15.85.

The 10-day moving average of stocks advancing on the NYSE fell to 51% at the close Friday.  (A number above 50% for the 10-day average is generally good news for the market.)  Over the past 3-days, the 50-dMA of advancing stocks fell along with the 10-dMA, while the S&P 500 has been basically flat.  That is a bit of divergence that suggests the index may resume its decline next week; however, New-high new low data is not giving a clear signal.

New-highs outpaced new-lows today leaving the spread at +67 (it was +53 Thursday), with the 10-day moving average of change in spread positive, but still trending down.  That's a mixed signal from the new-hi/new-low numbers. 

The Internals are neutral on the market since I don’t have a clear signal.  (Of course that statement implies this is an accurate indicator.  It probably isn’t since short-term market calls are notoriously bad.)  Internals are sometimes helpful in predicting short-term moves, especially when the internals diverge from the Index.

Friday, the overall NTSM analysis remains HOLD at the close.

I remain about 20% invested in stocks as of 5 March (S&P 500 -1540).  The NTSM system sold at 1575 on 16 April.  (This is just another reminder that I should follow the NTSM analysis and not act emotionally – I am under-performing my own system by about 2%!)  I have no problems leaving 20% or 30% invested.  If the market is cut in half (worst case) I’d only lose 10%-15% of my investments.  It also hedges the bet if I am wrong since I will have some invested if the market goes up.  No system is perfect.