WEEKLY MARKET DIGEST: WHY IGNORE THE SHOCKING EMPLOYMENT DATA $GLD $SLV $USO $DIA $SPY $QQQ $TBF $TBT

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(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. ) 

WHY IGNORE THE SHOCKING EMPLOYMENT DATA

January 10, 2014

This morning the Department of Labor released shocking employment data.  December unemployment rate fell to 6.7% vs. consensus of 7%.    The unemployment rate was 7% in November.

In our analysis, we give very heavy weight to Nonfarm Private Payrolls, they came at 87K vs. 198K consensus; some whisper numbers were over 220K.

December Nonfarm Payrolls came at 74K vs. 197K.

The plan is to ignore this shocking employment data and taking the opposite side of any exaggerated market move in bonds, stocks, gold, and silver.

The December data is likely an anomaly, it is not the first time this has happened.  For this reason, at The Arora Report we base our analysis on a three month moving average.  Our projections are that overall the economy will continue to grow at about 170K to 200K monthly Nonfarm Private Payroll gains.

There are three points of note in today’s employment report.

  1.  Labor participation rate fell to 62.8% from 63.0%.  More and more people continue to drop from the labor pool because jobs are hard to find.
  2. November Nonfarm Payrolls were revised to 241K from 203K.  December data is likely to be revised upwards.
  3. Employment in construction dropped for the first time since May of 2013; it is likely due to weather conditions.  Weather conditions are always temporary.

The Federal Reserve is likely to understand that the December report was anomalous and continue on its path of tapering.

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Gold futures are at $1242, silver futures are at $20.09, and oil futures are $92.72.

S&P 500 resistance levels are 1850 and 1900; support levels are 1825, 1800, and 1775.

DJIA futures are up 20 points.

STOCKS ATTEMPT TO RALLY AFTER YESTERDAY’S DRUBBING

January 9, 2014

At least in the morning, stocks will attempt to rally after yesterday’s drubbing.

Weekly Initial Unemployment Claims came at 330K vs. 338K.

Interest rates are falling.

Oil is falling.

Gold is attempting a mild rally.

Gold futures are at $1228, silver futures are at $19.59, and oil futures are $92.70.

S&P 500 resistance levels are 1850 and 1900; support levels are 1825, 1800, and 1775.

DJIA futures are up 50 points.

ADP EMPLOYMENT DATA BETTER THAN EXPECTATIONS, FOMC ON TAP

January 8, 2014

ADP employment change came at 238K vs. 2o3K consensus.  In other words, the employment picture in the U. S. private sector is getting much better.

FOMC minutes will be released this afternoon at 2:00 pm.  They are likely to be a market moving event.

Oil fails to stage a rally.

Interest rates are rising in the wake of better employment data.

Gold is falling not only on better employment data, but also on the fear of what the FOMC minutes may contain.

Gold futures are at $1220, silver futures are at $19.40, and oil futures are $93.85.

S&P 500 resistance levels are 1837, 1850, and 1900; support levels are 1825, 1800, and 1775.

DJIA futures are down 15 points.

EXPECT A BOUNCE IN THE EARLY TRADE

January 7, 2014

Expect a bounce in the early trade in stocks to relieve the oversold condition in the very, very short-term.

See also  MOMO CROWD WANTS THE FED TO BOW TO THEM, WHAT HAPPENS TO THE STOCK MARKET IF THE FED DISAPPOINTS?

Gold, oil, and interest rates are all pulling back.

Gold futures are at $1231, silver futures are at $19.77, and oil futures are $93.47.

S&P 500 resistance levels are 1837, 1850, and 1900; support levels are 1800, 1775, and 1766.

DJIA futures are up 68 points.

CHINA SPOILS THE PARTY FOR STOCKS ON THE FIRST FULL DAY OF LIQUIDITY, GOLD RALLIES

January 6, 2014

HSBC Service PMI for China fell to 50.9 from 52.5.  This caused Asian markets to go into the red.  Shanghai fell 1.8% and Nikkei lost 2.4%.

Europe is taking the Asian sell off in stride.

Gold continues to rally.

Oil is under $95.

Interest rates are falling.

Gold futures are at $1240, silver futures are at $21.16, and oil futures are $94.20.

S&P 500 resistance levels are 1837, 1850, and 1900; support levels are 1825, 1800, and 1775.

DJIA futures are up 39 points.

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