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Jobs- Big Picture and Good News/Bad News Market Reaction in Stocks and Bonds

Nonfarm Payrolls- Not Seasonally Adjusted - May 2020

Total nonfarm payrolls as reported by the Trump Regime Bureau of Liar Statistics rose 2.25 million on a not seasonally adjusted basis, before downward revisions for March and April. This is based on a comparison of the year to year change for May vs. the year to year change for April.

Liquidity moves markets!

Follow the money. Find the profits! 

Nonfarm Payrolls Table - Not Seasonally Adjusted - May 2020

The previously reported figures for March and April as reported last month were revised down by 1.2 million. Including the downward revisions for March and April the net gain was 1.2 million. This compares with a gain of 2.5 million in the BLS headline number.

Traders saw this as unequivocally good news. The 3 day cycle projection rose to 3185 on the reaction to the news.

In the Treasury market, not so much. 10 Year Treaury Yield Chart

This is catastrophic.  Full story here:

Dealers Don’t Care That Fed is Tightening, But They Will on Friday

We’ve watched this bizarre scene unfold where the Fed is gradually reducing QE, the Treasury keeps pounding the market with new supply and stock prices keep rising. Here’s how they did it, and what changes ahead will force a change in the outlook.

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Weekly Technical Trader update from last weekend.

Bullish as Hell, But Wait! What’s This?

The Fed is no longer pumping enough money into dealer accounts to sustain bull markets in both stocks and bonds, and it has tried to steer investors out of stocks and into Treasuries. It doesn’t matter. Rising markets create their own liquidity until they don’t. It’s called margin. Technical analysis shows us the effects of that, tells us what the trend is, and indicates when it might be reversing.

The trend is up, and there’s no sign of reversal yet. However, after reviewing my chart pick screens I came up with twice as many shorts as longs. Is that my bias, or are those individual charts trying to tell us something, the first canary singing?

Here’s what we’re watching.

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Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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