If this morning's knee jerk reaction was not so predictable it would be laughable. Last week when claims hit 500,000 (and last afternoon!) I wrote there was a bright side. Once bad news accelerates, when it falls back to a level that is still awful but "less bad" we can buy the market in glee while cheering "second derivative improvement". Even though the number we are buying as we yell "whew! not so bad" is recessionary. My only surprise is the rally sputtered out...
Here is the Wall Street game.
4 weeks ago - jobless claims 470K. That's not good.
3 weeks ago - jobless claims 480k. Getting worse.
2 weeks ago - jobless claims 480k. Uh oh.
Last week - jobless claims 500k. Yikes!
This week - jobless claims 473k. Great news!
[keeping in mind any reading over 450K is awful, and a real recovery should bring this number below 400K - which has not happened once during the entire government sponsored 'rebound' in the economy]
I am using jobless claims but you can replace it with any economic data series and you see the same laughable behavior. The normal perma bulls are out this morning saying the coast is clear.
S&P 1057 is one of the key levels and we remain stuck on it so far today after the initial spurt of buying on "good news". I was hoping to see that upside gap filled at 1067 due to the 'happy happy joy joy' number this morning. Putting on an index trade that lasts more than a day is near impossible with the herky jerky reactions to all the economic data we have coming our way. Prepare for the same nonsense tomorrow with Q2 GDP revision. I remain worried about Sunday night and the Chinese PMI figures - if China goes the 'decoupling theory' takes a big hit.
Best Of FMMF
- 1: Warren Buffet Piles on Europe
- 2: [Video] Jim Chanos Returns from Europe, Even More Bearish on China
- 3: A Chart to Open Our Eyes - Staggering Changes by Multinationals in Employment Behavior 00s vs 90s
- 4: Futures Blasted on Dexia Woes... and Poor Preliminary China Data
- 5: Market Working to Worst Thanksgiving Since 1932
- 6: Et Tu, German Bonds? Poor Auction Raises Eyebrows