Jobs? What Jobs?

by Larry Levin

Were you surprised by Friday's (lack of) Jobs Data?  Surely you weren't shocked by the awful facts, but do you know who was?  Economists, of course!  People often complain that the weather man never gets his predictions right but in my opinion; economists are worse - far worse.  
 
We all make mistakes in our lives, especially when trading.  But that's not the same as one who is on television day after day, program after program, and writing blog after blog where he pontificates on both micro and macro economics.  And this bloviation is no more constantly wide of the mark than Joe LaVorgna, chief economist of Deutsche Bank, who RAISED his NFP estimate from 100,000 to a ridiculous 175,000 the day before the release.
 
Here are the data that economists missed...

• US Payrolls +18,000
• Last Month Quietly Revised Lower to +25,000 from +54,000
• US Unemployment Unexpectedly Rises +.1 to 9.2% Despite Drop in Participation Rate
• Since March, Number of Unemployed Rises by 545,000
• Household Survey Number Unemployed Up 173,000
• Household Survey Number of Employed Down 445,000
• 272,000 people dropped out of the labor force, reversing the labor force gain of 272,000 last month.
• Average Weekly Workweek Drops by .1 Hours
• Average Manufacturing Hours Drops by .3 Hours
• Average Private Hourly Earnings Decrease 1 Cent
• There has been virtually no improvement in part-time employment in a full year. 8.5+ million workers want a full time job and cannot find one.

 
In true Fraud Street fashion, however, the market virtually ignored this catastrophically bad news.  
 
Here are a few more data points...

• The S&P futures spiked into Friday;s close on massive buying.  Was it short covering or the "buy the dip: mentality?
• S&P futures only closed lower by -9.25 points.
• Friday’s volume was 14% higher than the recent 10-day average.
• However, Friday's volume closed with 1.49% net aggressive BUYERS over sellers, despite the news.
• Friday's late spike brought in roughly 32,000 net aggressive buyers over aggressive sellers.
• In the end, Friday's range, profile, volume, and volatility were that of a run-of-the-mill drop.

 
Investors will talk about this terrible jobs data in the coming week; however, I believe the main topic will be Italy.  The European financial tumor continues to spread, as I have repeatedly said, and should make for an interesting week.
 
But don't worry; more bailouts will come in Europe from bankrupt countries to bankrupt countries, with counterfeit cash conjured up out of thin air...Las Vegas magician style.

Trade Date: 7/8/11

E-Mini S&P Trades*

(before fees and commissions):

1. FT buy @ 11:26am at 1132.50 = +0.25 & + 2.00 (2 lots)

2. Algorithm positions (4)

3. "Reading the Tape" positions (10) ...combined Secret's, Algo, & "Reading the Tape" total...+3.50

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