Good morning, everyone, and Happy Friday to you. Well, the monthly jobs report came in, and it was utterly tepid. See that red arrow? (I sure hope so). That’s the spread between expectations (the gold line) and reality (the blue bar). You’ll notice there are quite a few of those lately. Simply stated, there were vastly fewer jobs created than expected.
Equities, of course, LOVE this, for the simple reason……..
- The jobs market remains lame (because giving people money to sit at home isn’t a great incentive to do anything);
- Thus the ultimately-impotent Federal Reserve will, once again, scurry away from their minuscule pledge to withdraw a teensy weensy bit of the trillions of dollars they are showing onto billionaires;
- And, in turn, the equity market will be propped up that much longer by this Insanity.
As I’m typing this, the ES, NQ, and RTY are all green, although not be earth-shattering amounts (about half a percentage point each). The overall trend of the ES is still in a “sawtooth” type pattern of violent ups and downs. Indeed, the big news of the jobs report, which I’ve marked with a rectangle, is just a blip.
The past five trading days have been exhilarating and fascinating. A am long puts on the TLT, which should do all right, but I’ll probably trim off some of my bearish plays (maybe 15% or so) just to be a little less aggressive until the smoke clears.
As a side note, I find the Mexico country fund (EWW) to be quite a beauty, and I’d suggest you keep an eye on that neckline. I’m already bearish on this by way of January puts.
