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Disappointing unemployment number

Top Day Recommendations

6.03.11

The unemployment number comes in at 54K. The headline number comes in 9.1%. These are disappointing numbers. Supposedly, the recent rash of bad weather in the Midwest wasn’t a factor in these numbers. I guess the ADP private jobs forecast was closer than most hoped this time. Stocks will be under pressure early then they might "see" beyond this event as the day unfolds. The reflex reaction is lower crude, lower commodity currencies, higher Yen and SF on risk aversion. Again, inflationary fears are somewhat misplaced as there are three legs to the model. With these employment numbers, there certainly isn’t wage inflation. Housing remains underwater so there isn’t property valuation inflation while there is commodity inflation with higher grains, gold at 1500, the price of oil, etc. Seems to be more a model of stagflation. These unemployment numbers certainly won’t help the real estate sector. The bond bears will continue to have to wait. Will there be a QE3? The guess from this vantage is no. The problem going forward is not to heed the calls for greater restraint but to create jobs, then create more jobs and more jobs after that.

The chart below is a reprise from yesterday with the speculative suggestion that the EC will eventually trade at a 130 handle.

Conveniently enough, 149.25 (the approximate high) - 139.63 (proximate low) = 9.62. 139.63 – 9.62 = 130.01. Fearful symmetry?

Week of May 30 - June 03

Date ET Release For Actual Briefing.com Consensus Prior Revised From
May 31 09:00 Case-Shiller 20-city Index Mar -3.7% -3.4% -3.33%
May 31 09:45 Chicago PMI May 63.0 62.5 67.6
May 31 10:00 Consumer Confidence May 67.5 66.3 65.4
Jun 01 07:00 MBA Mortgage Index 05/27 NA NA +1.1%
Jun 01 07:30 Challenger Job Cuts May NA NA -5.0%
Jun 01 08:15 ADP Employment Change May 190K 170K 179K
Jun 01 10:00 ISM Index May 57.0 57.6 60.4
Jun 01 10:00 Construction Spending Apr -1.0% -0.5% 1.4%
Jun 01 15:00 Auto Sales Jun NA NA 4.73M
Jun 01 15:00 Truck Sales Jun NA NA 5.38M
Date ET Release For Actual Briefing.com Consensus Prior Revised From
Jun 02 08:30 Initial Claims 05/28 400K 413K 424K
Jun 02 08:30 Continuing Claims 05/21 3700K 3688K 3690K
Jun 02 08:30 Productivity-Rev. Q1 1.6% 1.6% 1.6%
Jun 02 08:30 Unit Labor Costs-Rev. Q1 1.0% 0.9% 1.0%
Jun 02 10:00 Factory Orders Apr -2.0% -1.0% 3.4% 3.0%
Jun 02 11:00 Crude Inventories 05/28 NA NA 616K
Jun 03 08:30 Nonfarm Payrolls May 175K 185K 244K
Jun 03 08:30 Nonfarm Private Payrolls May 190K 220K 268K
Jun 03 08:30 Unemployment Rate May 9.1% 9.0% 9.0%
Jun 03 08:30 Hourly Earnings May 0.1% 0.2% 0.1%
Jun 03 08:30 Average Workweek May 34.3 34.3% 34.3
Jun 03 10:00 ISM Services May 53.5 53.3 52.8

- Numbers are good up until the close of business today. These are strictly technical in nature, not fundamentally based or biased.

Legend

P is Positive

N is Negative

PRD is Potential Reversal Day

S2 is strong support

S1 is good support

DS is Daily Support

DR is Daily Resistance

R1 is Good Resistance

R2 is Strong Resistance

Levels are for the most active futures contract

Daily Support and Resistance

Some of these numbers are badly skewed due to Monday’s holiday when some markets were closed, others open

Trend S2 S1 DS DR R1 R2

Emini S+P PRD 1290.50 1310 1298 1318.75 1342.5 1353.50
Emini Naz P 2257 2295 2303 2336 2257 2380.50
Yen P 120.80 122.57 123.00 124.31 124.57 125.40
EC P 138.40 140.50 143.64 145.54 143.90 145.14
Sep 10 Year P 122.10 12303 122.23 123.11 124.10 124.25
Sep 30 Year P 124.04 125.0 124.11 125.28 126.13 126.30
Soybeans P 13.485 13.642 13.90 14.19 13.966 14.136
Corn P 7.05 7.317 7.49 7.72 7.75 8.015
August Gold P 1456.6 1485.0 1520.2 1545.3 1529.4 1545.4
July Silver P 32.56 35.29 34.51 37.22 39.80 41.57
July Copper N 386.50 402.5 403.60 417 426.6 435.16
July Crude N 94.14 97.44 97.50 101.40 103.22 105.20

N.B.: if you initiate a trade using ANY of these

numbers use a STOP at least equivalent to 2 ½%.

Repeat: use Stops. Don’t think about using Stops.

Use Stops. Some find it appropriate to look at the

margin requirement and use that as a Stop or if

it’s a steep initial requirement, use half. But

whatever you do, stop thinking about any other

alternative and use Stops.

********************************************

Futures trading entails considerable risk and is not for

everyone. An account can lose more than its initial investment.

Stops are not necessarily filled at the stop level. Past

performance is not a guarantee of future results.

 

Charles Kespert

***********************

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BEING MADE THAT ANY ACCOUNT WILL OR IS

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