More Bad News

by Larry Levin

A few days ago I briefly discussed that day's bad news, which is listed again to make the point of the non-stop bad news thus the title: More Bad News.

The ICSC-Goldman retail sales report, Empire State Mfg Index, Redbook retail sales, and a Housing Index were all worse than expected. Housing starts the next day were also worse than expected.

Today's data was no better.

Remember when the government lied (woops, I mean said) that the employment picture was much MUCH better and that the jobs market was radically improving? Yeah, not so much. Today's weekly jobs data was bad...again. Initial claims came in at 472,000, up 12,000, compared to an expectation of 450,000. Last week's bad data was revised even worse from 456,000 to 460,000. Moreover, continuing claims in the June 5 week rose 88,000 to 4.571 million, after the previous week was revised up 21,000.

Thank goodness strong job growth isn't necessary for the economy these days.

Although the job market was bad, there was "More Bad News" in the offing. Thirty minutes after the open there was a gasp in the pits when Philly Fed number was released, then instantly all you could hear was "SOLD!" What led to the immediate drop was the expectation of a 24 data point - rather in was released as 8. A monumental miss indeed, and bleak prospects for the future if this continues.

The full Philly Fed report can be read here:

http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2010/bos0610.pdf

In it we read...

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased notably from a reading of 21.4 in May to 8.0 in June. The index, which had edged higher for four consecutive months, fell back to its lowest reading in 10 months.

Until this month, firms’ responses had been suggesting that labor market conditions were improving, but indexes for current employment and work hours were both slightly negative. For the first time in seven months, more firms reported a decrease in employment (18 percent) than reported an increase (17 percent).

But don't you worry folks, those hard working folks at JPM and Goldman Sachs, as well as various high powered hedge funds, have got your back. At the end of the day there was another magical low volume rally sponsored by the aforementioned companies and supervised by the Sky Net HFT computers. By the close, nearly all of the losses at been recouped as if...as if...hmm, as if there was good economic news or something.

Bah! Who needs that anyway?




Previous Day's Trading Room Results:

Trade Date: 6/17/10

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


1) VA buy @ 8:37am at 1111.25 = b/e, -.50, -.50 (3 lots)

2) OTF buy @ 11:38am at 1105.50 = -1.50 (1 lot)

3) FT buy @ 1:19pm at 1108.00 = +.75 & +.50 (2 lots)

4) Algorithm positions (15)

5) “Reading the Tape” positions (15) …combined Secret’s, Algo, & “Reading the Tape” total… +18.75



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