Yes, the BLS is simply comical.

While there are some traders who feel relieved by the “good” jobs number, it won’t be enough to spark a substantial rally. After all, on Thursday the SPX could only muster a 1-point advance in the wake of the “good” news. And that 1 point was a gift because the market closed before oil soared in the afternoon.

That move up in oil was no accident either. It is being driven by the jobs numbers more than anything else. Playing on the long side here is very risky.

Matt

Here is the pertinent snip from the BLS on Birth/Death Methodology.
The net birth/death model component figures are unique to each month and exhibit a seasonal pattern that can result in negative adjustments in some months. These models do not attempt to correct for any other potential error sources in the CES estimates such as sampling error or design limitations.
Note that the net birth/death figures are not seasonally adjusted, and are applied to not seasonally adjusted monthly employment links to determine the final estimate.
The most significant potential drawback to this or any model-based approach is that time series modeling assumes a predictable continuation of historical patterns and relationships and therefore is likely to have some difficulty producing reliable estimates at economic turning points or during periods when there are sudden changes in trend.

I have a large QID position and may add to it if the market is able to bounce. I took profits on my SKF and rolled some of the cash into XLF puts, so my position is the same there. I haven’t been trading gold, but I’m guessing it will be OK as the dollar crumbles. I don’t think the S&P will be able to hold the March low for much longer, so I consider any rally to be a gift for shorts.

Matt

I’m a relatively new trader and have 1/4 in QID, 1/4 in SKF, and 1/2 in GLD. I am thinking about gradually moving more into QID and SKF and am wondering what you might think of that. Thanks in advance.

If you want to go long on the BLS data, save yourself the commissions and just send me your money.

Glad you like the blog.

Matt

Great blogsite btw!

The market moved ahead of the jobs release due to a widely circulated whisper number over 100k. So, the jolt came Wednesday afternoon rather than Thursday morning. Oil also moved up sharply once again just as it did with the June jobs report. The job losses are far worse than anybody is thinking, and are what is really crushing the market.

I’m waiting for the SPX to close below the March intra-day low. It won’t be long.

We haven’t had a lot of pre-announcements, but I think the theme for earnings will be “Not too bad, but terrible guidance.” The market will not like that.

Matt

All of my ideas about the withholding data are posted on that page. The situation is very bad.

Matt

A couple of weeks ago, I wrote “stick a fork in the XLE”. The big institutions are definitely unloading stock there, just like everywhere else. But there has been no effect on the price of oil. Oil is being driven more by the jobs numbers than anything else right now. Iran is less important than you think it is. I still think oil will be the very last thing to crack. Oil will crack the global economy, the stock market will crash, and then oil will follow it down. Waiting for a crack in oil to save the market is the worst investment strategy that I can think of.

Matt

Those betting on a confrontation with Iran and further sharp hikes in oil prices to crash the markets are going to lose that bet IMHO.