Thursday, January 7, 2010

Morning Update/ Market Thread 1/7

Good Morning,

Equity futures are down this morning, here’s a snapshot of the overnight DOW and S&P action:

The Dollar is up very sharply, bonds are flat, oil and gold are both down a little after oil’s rocket ride of late. In fact, oil’s gone straight up ever since Dubai’s debts were backed.

Both the Yen and the Euro are lower. Below is a chart showing the Yen on the left (up is lower Yen), and the EUR on the right (down is lower here). Note the flag that has formed on the EURO. Should that flag break downwards as I’m expecting, the target will be about 1.33ish:

The Monster employment report fell from 119 to 115. Here’s their and Econoday’s spin:
Monster's employment index fell 4 points in December to 115 reflecting what the report said is seasonality during the month. The year-on-year reading, which limits the effect of seasonality, is the best in 18 months at minus 12.2 percent.

“Reflecting seasonality?” Gee, I thought December was supposed to have increases in employment as people are hired for the Christmas season? The BEST year over year reading is minus 12.2%? Oh my. They don’t normally report that, if they want to spin the positive, then maybe they should have waited a while longer to come out with the yoy figures!

Weekly jobless claims rose last week to 434,000. This is better than the consensus read of 450k, here’s the positives:
Initial jobless claims were little changed in the Jan. 2 week, up 1,000 to 434,000 (prior week revised 1,000 higher to 433,000). The Labor Department reported no special factors. The four-week average extended its long streak of improvement, down a sizable 10,250 to 450,250 for its lowest level since September last year. Continuing claims continue to show improvement, down 179,000 in the Dec. 26 week to 4.802 million.

I’ll dig up the report and we’ll take a look at the number of emergency claims later in the daily thread. Tomorrow is the monthly employment report.

There are a ton of Treasury auctions that are supposedly going to run this afternoon. The Treasury’s site is not indicating in its normal spot that there are any, much less the amounts. In a different location they posted a tentative schedule but not with amounts. I’m guessing there’s a lot of issuance today, we’ll keep tabs on that, too, as results come in.

Yesterday’s movement produced another small change of the McClelland Oscillator, therefore expect a large move either today or now tomorrow. I will not be surprised by a large move tomorrow on the jobs report.

Still no sizeable volume, this market is WAY overbought, divergences are everywhere I look. The VIX bounced off of support yesterday, and the XLF continued rising above the upper Bollinger. Prices are still within the new smaller rising wedges and so the odds of them being in play is good. A break below about 1,125 would break the lower boundary on the SPX. The support pivot right now is 1,133, then 1,107. Resistance is at 1,168.

Did everyone catch Barney Frank’s handiwork in trying to sneak rules about shorting equities into his latest bill? Here’s the story at ZH if you missed it: In Order To Make The Ponzi Market Keep Going Ever Higher, Barney Frank Tries To Make Shorting Virtually Impossible . And thus stocks can only go up and the games people play continue:

Joe South – Games People Play: