We Get It

Another disappointing jobless claims number was probably the best thing that could happen for the bulls. At this point nobody in their right mind is expecting anything but a terrible number tomorrow.  With expectations as low as they are now it will take one whopper of a number to surprise anybody. Except for economists who still have not lowered their estimates as their models say everything is a-ok.


PJ said...

Actually, tomorrow's number should be mediocre rather than terrible. In my models, hiring was very strong in late May and early June, before falling off a cliff in late June. That pattern is also validated by the Daily Treasury Statement of withholding revenues.

Survey week for the payroll report is around June 12, capturing growth since May 12, so it caught the entire mini-surge in hiring from mid-May. BLS will probably show private payroll growth higher than ADP, as they'll miss the small business layoffs ADP caught, and the overall number may not be as negatively impacted by census worker layoffs as some suspect. Many census workers had second jobs and so almost half the laid-off census workers will never counted as unemployed. Wouldn't be surprised to see a headline payroll number near zero, +50k private.

This, however, will be the last payroll report that might have an upside surprise. I expect a steadily weakening job market from here.

Tsachy Mishal said...

Do you expect a rally on a mediocre number?

PJ said...

That's your area of expertise, not mine. I'm more like JD, I'm staying short on intermediate term economic decline and deleveraging forcing asset prices down. I am trading between 80% and 100% short, right now I am 80% short because of a chance of a bounce.

My goal is to be more short on moves down than I am on bounces. But really, for me this short-term trading is more practice for a later market when the directionality is more sideways or up than down. I think bear moves like we're in tend to be sharper and quicker so it's not a good idea to trade out of short positions in a bear market. In the next bull or sideways market I plan to do a lot more short-term trading than I have in the past, and I am trying to get some practice in with small money.

But if you put a gun to my head, to use JD's expression, yes I think if we can go a day without bad news there should be a bounce. It's just that days without bad news somewhere in the world are going to be rare.

Onlooker said...

Once again the opening ISE number was huge. The second one won't be, I'm sure.

They're still trying to catch the bottom here. Unfortunately I got out of most of my shorts at the close yesterday and the rest on the open today. But I'm happy being in cash for now. Should have followed PJ's tactics, no doubt. Will do on the next large bounce - whenever that comes.

Anonymous said...

I am starting to take some profits here on this flush out. Expect at least some consolidation, we'll see.


Anonymous said...

I know your not a big believer in charts Tsachy, but I can see the S&P going to 880....not today obviously.

Thats the next major support area. There are smaller ones before that.