ISM Services Index

by Larry Levin


As you already know the recent spate of economic news has been very bad. Today's wasn't horrible but was once again worse than expected and thus confirms last week's bad data. When taken together, Goldman Sachs is calling for a massive second half GDP slowdown to a mere 1.5%. Moreover, if the lackluster 1.5% prognostication turns out to be valid, stock valuations will have to fall, even from this current level, in order to adjust to the slower growth.

Read full ISM report here

In June, the NMI registered 53.8 percent, indicating continued growth in the nonmanufacturing sector for the sixth consecutive month, but at a slightly slower rate than in May. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.

Employment activity in the nonmanufacturing sector contracted in June after one month of growth. ISM’s Non-Manufacturing Employment Index for June registered 49.7 percent.

Orders and requests for services and other non-manufacturing activities to be provided outside of the United States by domestically based personnel contracted in June after three consecutive months of growth.

ISM’s Non-Manufacturing Imports Index contracted in June after three consecutive months of growth.

Although the ISM Services is another diffusion index that equates readings above 50.0 to growth, the trend is the same and that is bad news: the heretofore GDP growth is over. What's more, it wasn't real growth at all but a mirage of government spending that cannot continue. As the wasteful government spending is withdrawn the economy will get on with reality and that is cleaning up balance sheets the old fashioned way - naturally through default.

Then again, with an election coming up you can bet the house on QE 2.0 being announced soon (Quantitative Easing (read: wasteful spending)).




Previous Day's Trading Room Results:

Trade Date: 7/6/10

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


1) No "Secrets" trades filled today.

2) Algorithm positions (13)

3) “Reading the Tape” positions (5) combined Secret’s, Algo, & “Reading the Tape” total… -8.00



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