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The government released its latest read on the job situation in the US last Friday. Traders were expecting a much better number, some even guessing a release north of 200,000 new jobs. Unfortunately, it wasn’t even close.
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July nonfarm payrolls were +162K missing expectations of 185K and the whisper numbers of 200K+
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June data were revised lower to 188K
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The unemployment rate fell from 7.5% to 7.4%. The rate dropped due to the decline in the civilian labor force by 37K
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The labor force participation rate dropped (again) to 63.4% from 63.5%.
In the following video Dan Alpert, managing partner at Westwood Capital, says “What you’re seeing is now the spreading of low wage growth,” noting those trends continued in Friday’s July jobs report. “Really we have become a nation of hamburger flippers, Wal-Mart sales associates, barmaids, checkout people and other people working at very low wages.”
http://finance.yahoo.com/blogs/daily-ticker/become-nation-hamburger-flippers-dan-alpert-breaks-down-145831220.html?l=1
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—Larry Levin
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 In conjunction with TheStreet.com and Bar Chart, Trading Advantage Chief Market Strategist Alan Knuckman provides a daily morning update on the global action in stock futures, gold, oil and interest rates. |
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| Congratulations to Jim CapuanoCongratulations to our Student of the Day Jim Capuano. Not only did Jim hit the profit targets for the TAP trader program, he took the afternoon off to hit the links. The goal for many Trading Advantage students is to trade a few hours of the day and then have the time to enjoy their hobbies like golf. Jim proves this is an attainable goal. Congratulations. |
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NOTICE: Testimonials are believed to be true based on the representations of the persons providing the testimonials, but facts stated in testimonials have not been independently audited or verified. Nor has there been any attempt to determine whether any testimonials are representative of the experiences of all persons using the methods described herein or to compare the experiences of the persons giving the testimonials after the testimonials were given. The average reader should not necessarily expect the same or similar results. Past performance is not necessarily indicative of future results. No person was compensated for providing a testimonial.
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| OPTIONS: Volatility Commentary |
—Michael Shorr
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The big news today was the long-awaited employment numbers. Payrolls increased 162k jobs versus a consensus expectation of 175k. They also revised the previous month’s numbers down to +188k from and initial reading of +195k. The unemployment rate actually fell more than expectations down to 7.4% (more people rolling off the dole or forced to retire). The interesting (and ominous) breakdown of the jobs created showed that 60% of the jobs created went to those individuals aged 55-69, no jobs were added to those 16-19, 49k went to recent college graduates and only 15k jobs were added to the Americans in the prime of their careers, 25-54 years old. Not a very good sign that those individuals that should be working less often and less hard are doing the complete opposite. For the third month in the last four, US Factory Order growth missed expectations. In fact the last four months have seen the biggest plunge in a year.
A very valuable tool in trading is not to try and trade the big thing now, it is to find the next big thing. With the inundation of data and 24-hour news cycle along with HFT firms pointing their little black boxes at the latest story, why fight it? Find the next thing that will be on CNBC and get on that before everyone else does. One part of the employment data that came out today was where the jobs that were created went and more specifically, where they did not. Housing and construction were both supposed to be huge drivers of our recovery. The largest decrease in workers last month? Construction. That sector lost 6,000 jobs. We are looking for cheap implied vol bear opportunities along that sector (XHB, TOL, MHO, NVR).
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| FOREX: Currency Spotlight |
—Ed Moya
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| The U.S. dollar rally against the euro hit a bump in the road on Friday when job creation in the U.S. surprisingly slowed down. With many forecasts expecting NFP to post a reading near the 200,000 mark and some even looking for a 250,000 reading, the dollar sold off and high-beta currencies rallied immediately after it was reported that June only saw 162,000 jobs created.The 3-month average is 175,000 and the average for this year is 169,000. Revisions for the past two months also knocked off another 26,000 jobs. The unemployment rate fell to 7.4%, its lowest level since December 2008. The improvement in key rate was mainly due to the slight tick down in the participation rate to 63.4.The dollar over the next year however will likely gain further momentum as the economy continues improve. The question however will be how the Fed handles the art of tapering. Expectations will be ironed out over the next few weeks and many should anticipate continued volatility and ranges to persist for the rest of the summer with EURUSD and GBPUSD. |
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| STOCKS: Watch List |
—Charles Moon
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| The markets fell into a familiar pattern when it took a slide early on, only to rally once the lows were set in for the day. Rebounding off the lows on Friday’s trading action due to a lukewarm jobs report, the market rallied off the idea that maybe the Fed can’t actually trigger tapering yet. At least not with this type of growth in the jobs market. Moderate at best, we still have a long way to go before tapering will happen. Even with tepid jobs numbers early on, the Dow and the S&P 500 hit record numbers for all time and closing price high. The fear remains low and the bulls are in control for now thanks to the Fed.
The trading action was still slow and looks to remain this way for the time being. Even with economic data coming out this week, I still expect the action to be slow with spurts of volatility. While I don’t anticipate the same boring and flat trading conditions we face a couple of weeks ago, I also don’t think we will be seeing huge swinging days like we did 2 months ago. I expect conditions to remain choppy at best here. If anything the pattern of sliding then rallying has been consistent the few weeks. While the markets may not rally all the way into positive territory, it has for the most part fought back from the lows consistently. Watch the 1700.00 in the S&P 500 here for support. It was tested Friday early on in the trading session, and that is when the market started to rally. That looks to be a key price point, as a break of that level without an immediate rally could have it drop to 1689.00 range. It could even fall back to the 1680.00-1682.00 range, but I think support should come in earlier then that. As far as resistance goes, well there is no real resistance. I believe the struggle will be to the upside, while the quicker profit can be made on sells if the timing is right. When stocks are trading at 52 week highs or all time highs, the profit potential could be less then a slide in a stock that has been overbought. The key will be timing on these trades the next few weeks. The potential is starting to show itself these days, but caution is a must in these market conditions. Open Position: LOW, UA Stocks to Watch: INTC AAPL GOOG IBM AMZN ADBE LNKD FB TSLA GRPN CTXS CSCO NTAP JBL BAC C PRU WFC GS JPM MS RIG DE CMI CAT NFLX WDC GE AIG LULU DIS CROX STZ NKE UA LULU CHKP JNPR POT GMCR VZ T HOG MON YUM MCD LOW HD LEN TOL V MA AXP DFS LVS MGM
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| FUTURES: Technical Data |
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ES 1703.25 / 1697.25
POC… 1697.50
YM 15572 / 15510
NQ 3132.00 / 3117.00
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| COMMODITIES: Play of the Day |
—Patrick Assalone
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| The grains, especially Soybeans, continue to provide the best action with the summer market/growing season action dominating the trade, The opportunities have been plentiful and we continue to take successful signals. Based on our educational methodology, we are still only looking for short Soybean signals with a reversal at 1193.25 or the first break out below 117625.Click here to watch video |
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| is a leading investment education firm that empowers traders to achieve and surpass their financial goals. More than 50,000 students have used Larry Levin’s proven techniques for powerful results. |
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IMPORTANT NOTICE: Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. Nothing in our website shall be deemed a solicitation or an offer to Buy/Sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of future results. Trading Advantage LLC provides only training and educational information. By accessing any Trading Advantage content, you agree to be bound by the terms of service. Click here to review the terms of services.
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JOHN DANIEL BEGG 