In the last episode, TrimTabs Investment Research found fabulous, fabulous news in the withholding-tax data – just before the economy took an historic plunge. Here is what Madeline Schnapp said on April 1, 2008:
“Once panicked investors realize that their fears of a deep and prolonged recession are not materializing, U.S. stock prices could shoot up very quickly.”
Comical, right? So, what is TrimTabs saying now? Here is what MarketWatch reported on Tuesday, June 8, 2010:
“TrimTabs Investment Research Inc. tracks the real-time jobs picture by monitoring income tax deposits at the Treasury. And these have suddenly started falling. Based on the latest data, the firm predicts the economy will actually lose up to 200,000 jobs, net, in June. ‘The big news is that we have a job loss of about 200,000 coming in June,’ says Trim Tabs’ Madeline Schnapp, ‘and the market isn’t ready for it.’”
Is that so Ms. Schnapp? Well, then how do you explain this? Here are the federal withholding-tax collections (in millions) for this week (so far) compared to the corresponding week from last year:
| Last Year | Tax | This Year | Tax | ||
| Mon | 6/8/2009 | 8,698 | Mon | 6/7/2010 | 8,722 |
| Tue | 6/9/2009 | 1,379 | Tue | 6/8/2010 | 1,495 |
| Wed | 6/10/2009 | 5,583 | Wed | 6/9/2010 | 5,686 |
| Totals | 15,660 | 15,903 |
It looks to me like payrolls are healthier than they were last year at this time – even if you knock off $20 million or so per day for temporary Census Bureau workers. But, you ask, what about the past few weeks? What about the trend? It’s all good. Nothing has “suddenly started falling.” (See the fancy charts at DailyJobsUpdate.com.)
Note: in the table above, if you click on the dates, you can see the Daily Treasury Statement for that day. Scroll down to “TABLE IV — Federal Tax Deposits” and look at the “Withheld Income and Employment Taxes” line item. Unlike some people, I don’t make anything up. And since I don’t operate a hedge fund, I have no problem simply reporting the truth.
George, check your e-mails again, I sent it to the two I know of.
Nice to have good, solid, honest data Matt. Thanks. Hard to believe as a business owner, but numbers don’t lie. People and manipulated statistics do!
2th,
I don’t require it. There are any number of ways this market could move higher.
Matt,
Thanks for your tireless efforts. Sorry I can’t post (or even read) everyday, but please know your insights are greatly appreciated.
2thfixr,
I got the email. Thanks.
Here’s the SPY 60min chart. Price is trying to breakout of the down trendline resistance.
http://i48.tinypic.com/2vkc95v.jpg
Retail sales acted as a catalyst for revaluation of the SPX futures contract.
Here’s what the Opening Range looked like yesterday. Note how it tested the opening low and bounced off to go higher.
http://i49.tinypic.com/ank284.jpg
Glad you got it George. Nice SPY chart you posted as well. That is a very juicy gap from yesterday, yes? Could act as support initially, but once inside of it, kind of like a vacuum, whoosh….
2th,
My daily buy on the inverse still stands… so far. The lower gap will be important. That will be the tale of the tape for the next direction, IMHO.
100% agree with you. Not to sound contradictary to my e-mail, but I actually think we will go test yesterday’s high but not exceed 1092 today.
Matt,
Thanks for a great blog.
Put me in the bear camp. I went long SDS yesterday.
I’m wrong and gone with SPY >$112. Other wise, I’ll trade 1/2 of it and keep the rest for a run to $53. I think that is very reasonable now.
North of $112, I’ll wait for a test of the 50 SMA and then remount SDS
GLTA
I can see that. I’m thankful for the volatility. If the maket is going lower, it should continue being volatile.
Nice to have you in the bear camp hank.
Hank is very pensive too – he’ll be a worthy adversary.
2th,
I meant “I can see that happening”; the comment I wrote looks (insert crappy word of choice here).
The gap down put the SPX back under many of G’s MA’s on the 1, 5, 15 min charts. The only one it is above as I write this is 1-min 9 MA. Overhead resistance anyone?
Nearing the gap close 2th, depending upon the time frame viewed, the gap is filled, like on the 15min.
And it is above the 15-min 36MA…sorry I left that out. the U of M data (75) just pushed equities up.
Gap closure coming G….then the tale of the tape…..
Yep. Back off and test. I have my OR line drawn for the high.
http://i46.tinypic.com/23s6gya.jpg
Check the MACD’s followers….divergences on the shorter time frames.
I’ll be out for most of the rest of the day, but may check in a few times.
Have a great weekend G, Joan, mitch, matt, hank (going to Show Low!), JG, and welcome Kerry.
Back in OR
Well, as somebody who previously pointed out that in the last 2 weeks of May, the advance in withholding taxes came to a screeching halt, such that May 2010 was less than 1% above the truly awful May 2009, it is true that in the first seven reporting days of June, the Daily Treasury Statement shows $54.7B in withholding taxes collected compared with $48.1B last year, a gain of 14% YoY! For the last 20 reporting days, withholding taxes for 2010 are $129.4B vs. $120.9B a year ago, a gain of 7%.
I agree with you and disagree with Trim Tabs on this: so far, June looks pretty darn good.
I thought Trim Tabs was a diet pill(?)
Stringm,
Not only broke down below the OR high and failed the 5min 36MA support. Now, that being said, it could consolidate around that MA and move back up as it often does around the 36MA.
2th,
Enjoy your day. I’m assuming a run then golf or drill ‘em, fill ‘em, bill ‘em.
You too 2th, Enjoy!
Going with the basic assumption that the OR should contain the High or the Low of the day, but not both, This should turn well before we get to the OR Low.
Stringm,
On TOS, there is a hand at the bottom of a chart to click on to pan. It is still missing the x-hairs on multiple charts like SD. I really miss that.
SD seems to be OK today, and I am still shunning TOS for now. I have a retirement luncheon to go to today so I am not doing much more today anyway. I bought the flop this morning and I am out.
Joan – How about the Celts. They are still down home court advantage, but they are hanging in there!
String,
I am keeping my fingers crossed!
How was the reunion last weekend?
Joan
It was the neatest thing I have done in a long time. I would have hoped for more turnout, but we did have 16 old 8th graders. We were there for 10 hours, and it felt like time stood still for a minute, and then it was gone. Wonderful time, I still keep thinking about it.
String
String,
10 hours?! It must have been great catching up!
Thanks all. Actually, heading to my second home (trailer) in the mountains 2.5 hours away to open it. Then golf over the weekend.
George, so far, so good on the EW map. 1085 was the 62% Fib retracent of the wave down with no overlap of 1085.63. *IF* that holds first, and 1088.55 and/or 1092 holds after that–that map MAY be accurate.
George, String,
Give CrossHair a try:
http://www.mlin.net/CrossHair.shtml
Matt
Matt,
Fantastic… I’ll give it a try.
Thanks
Thanks Matt – off to the retirement lunch
Here comes the tale of the tape….
Looks odd that TLT is so strong yet the market is mostly flat!
String, noticed that too in the futures.
They made a new high for the day and have backed off a bit, but I was expecting more of a reaction in the equity mkt.
Remember what Phil always says: the bond traders know more than the stock market traders. They are buying bonds….while mom and pop are buying equities (okay, not mom and pop, but someone is).
Almost out the door….crash and burn anyone?
Joan
Phil would saying that was a sign of market weakness to come if he was here. Obviously he can dish it out but can’t take it!
String
Tooth
Is your place in Flagstaff? Crash is OK by me, flat is no fun!
String
With you both 2th & String!
Just a nice big wave 4 triangle or a ending diagonal wave 5 IMHO. If wave 4 triangle, that means we could get one more push up above 1088.55 to finish off this move up. If wave 5 was the wedge, time to head lower. Still have 1092 as the drop dead zone though.
Back at the high of the day in the 30 yr futures, VIX ticking lower, euro moving higher… if the weather was nice I would begin the weekend early like 2th.
I’ll refer you back to May 12th and 13th as we wedged up to 1173. Seems like the same thing to me….and I’ve labeled both areas as wave 4′s. JG, what say you?
Time to hit the road….I’ll check back in this weekend provided the “cable guy” gets the internet set up when I get up there this afternoon.
GLTA and watch 1092 for me….don’t let them run it over!
String…no, in Show Low….sorry I didn’t answer in my last post. Adios.
Have a good one 2th!
Well like I said flat is no fun! I have bought my little dab of SSO for the possible futures run up game on Sunday night, and I am out of here. Go Celts ! Good weekend to all!
String
String,
If you don’t check in this weekend have a good one (10 hrs – sheesh).
String,
And no one got nekkid huh?
May I suggest:
http://www.youtube.com/watch?v=4LX8tHyO89A
Whoa, my SSO rallied before the Sunday night fute ramp up. I might be in a Bull trap.
Mitch – you would not want to see any of that crowd get nekkid. Bunch of folks approaching 60, a spackling of parents in the 80s, and at the Church to boot. That just would not have worked. We did have some suds, and a wonderful time. Many,Many, Many stories were exchanged, and some were even true! I had not seen them in 40+ years. One was in my first wedding. I had tried to kill him one night drag racing, not intentionally, just the way it worked out. I was in the car too, so I guess I tried to kill us both. His wife said she was glad I didn’t succeed. Mine asked if I wanted to try again!
Good weekend to all the beer can chicken folks!
Here’s hoping phil drags his whipped ass back next week.
George
Now that we are into this OR stuff, there is a Pete Steidlemeyer (sp) document you need to download. It is on the CBOE site, and it is free. I have had it over a year, and digesting it has been really hard. It is starting to make some sense. If you can’t find it let me know and I will look for you!
String
Jungle Lady
I am back to rooting for bear option 2. I would like to see that right shoulder. Also, I could get the other half of my mom’s money out of equities. I need a weekend update on your thoughts if you get time!
String
String, agreed. I have liked it the best for awhile now. TA fits on many levels (RSI action, VIX waves, MACD form, personality of the waves, internals, etc.). Also, as I stated previously, my math fits that the best. It may be a bumpy ride because of some significant resistance levels, but I see the market going higher here. It may take a couple of weeks or more to arrive at our destination. Time is hard to judge early in a wave. Also watch out for the possibility of lots of opening gap action. That way, they can take more money from both the bulls and the bears.
I like the degree being Minor for now, i.e. Minor 1 done, on Minor 2. Never could buy off on the higher degrees, given how far we need to fall and the fact that we will see numerous retracements. I think Minor 5 (i.e. Intermediate 1) will likely complete below 666, but we’ll get a better idea as things progress along.
I see the form of Bear Option 1 being a more likely occurrence in Intermediate 3 than in intermediate 1, and even then I’d look for it on the 3rd of a 3rd. This is all IMHO, of course. After all, I’m just a simple jungle girl. Have a good one!
Great wkend All.
Unclear comment above. Wasn’t trying to say that Minor 3 won’t have any extension. It very well may. Just a greater amount of extension (more embedded 1,2,i,iis) may occur on Intermediate 3.
JG, et al in the EW crowd–
I’m with you that we are in Minor 2 (near the end actually) because of the trendline from the top that is coming down while price moves sideways/melts up to meet. When they do–fireworks–in my opinion. That line will be in the 1090′s as of Monday. The “smart” bond traders may be telegraphing that!
JG–Doesn’t Friday’s action look wedgie, ED, tired? What do you think of this EW map–it hit me last night after the wave 1/4 overlap happened at the close and I needed to rethink my count.
Minor 1 ended 1040.78. Then we have “A” ending on 5/27 around 1101, then an ‘abc’ for “B” ending at 1042.17. We’ve had a and b and are in c of “C” since then. Basically, the market is marking time until it hits the trendline from the 1220 top that hit 1209 and 1173.6. If that will be Minor 2, then Minor 3 is coming soon.
G–the map I sent you is wrong. disregard please.
2th,
IMHO, it’s more likely that Minor 2 will set a line rather than obey the one to which you refer. I think Minor 2 just started this week, so I see it taking more time to play out. Looking for more than 1090. Although that 1115 gap is heavy resistance, and it could all end there, I see 1150-1160 as a real possibility. It could even spike a little higher, like up to the 1175 zone. 1150-1160 is enticing. Have to watch the wave form as things progress along. Game plan can change on any given day… the market draws the map.