Monthly Employment Figures

by Larry Levin

Last Thursday I wrote a small piece titled The Waiting Game. In it I mentioned how market players were waiting on the employment data while trying to slip you a Mickey Finn: whisper number nonsense.

In it I said - Have you ever read an amazingly bad earnings report or piece of economic data and wonder - how in the hell did the market ignore THAT?! It was almost assuredly due to a new bar being set (lower) for the data in question, and then coming in line with it. For example, tomorrow's jobs data as said above will be bad. No doubt. So how can we ignore it? By pretending that the number could be 40% worse than is currently expected -- the very day before the report. Since this whisper number of 700k came out just this morning and was mentioned on TV, it's now the new benchmark; however, there is no time to investigate who came up with this number and how it was calculated. How convenient.

Naturally the media ran with it, especially the anchors on CNBC, as the whisper number was mentioned ad-nauseam Friday morning. Try as they might to make you ignore the bad data, the market reacted to it indeed, with a violent early drop.

However, as soon as the early trend began, it stopped - for the day! Once the first 15-minutes of the day had expired, the market repeated what it had done Monday, and Tuesday, and Wednesday, and Thursday, which was NOTHING AT ALL. I for one am quite happy that last week's wretched trading (if you can call trading) is over.

Said another way, once that 15-minute sell-off had ended, it was back to the recent business as usual: ignore the bad news. And what market participants were trying to sweep under the rug was colossal. Friday's jobs data was; the highest official unemployment rate since 1993, the lowest weekly hours worked since 1964, the most jobs lost in a year since 1945!

Moreover, the unemployment rate jumped to 13.5%. Did the media inform you of that? The official unemployment rate increased to 7.2%, but the real rate that includes job seekers who have given up looking for work, or who have been forced to accept part-time work is nearly double the official number. And you're no doubt already aware of the other data; 524,000 more jobs were lost in December, making for a total of 2.6 million lost in 2008. The losses have been accelerating, with 1.9 million jobs lost in just the last four months.

Hmm, no wonder the sophomoric line - it's not as bad as the whisper number (or) it could have been worse - rang hollow. That being said, however, this is a new week and the long-only fund managers desperately need a rally so it may be disregarded yet.

Previous Day's Trading Room Results:

Trade Date: 1/9/09

E-Mini S&P Trades*
(before fees and commissions):

1) VA buy @ 8:35am at 903.75 = -2.00 (1 lot)

2) Engf sell @ 9:40am at 889.50 = -1.75 (1 lot)

3) OTF buy @ 11:30am at 891.50 = b/e (1 lot)

4) VA sell @ 1:30pm at 896.75 = +.50 (1 lot)

5) Algorithm positions (3)...combined daily total...-5.00

ZB (30 Year Bond) Trades*
(before fees and commissions):


1) No trades today.



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