The collision of global markets and social mood

Friday, October 2, 2015

Friday -- Payrolls Dash Fed Hopes But Scares Market

S&P E-mini Futures:
Down hard on NFP miss.

Non-farm Payrolls missed by a wide margin . . . and futures tanked. Suddenly bad news is bad news.

The Fed clearly has ammo with this report to hold off raising rates, and that's probably what has the market spooked for the moment: the economy may be in real trouble, even after all that Fed medicine.

Here are some stats from Marketwatch with emphasis added --

"The U.S. economy created just 142,000 new jobs in September and the number of new hires in August and July was also revised lower, suggesting the labor market cooled off toward the end of summer. The unemployment rate was unchanged at 5.1%, though more people dropped out of the labor force. Economists polled by MarketWatch had expected a gain of 200,000 nonfarm jobs, so the results are sure to disappoint Wall Street and raise questions about whether the Federal Reserve will raise interest rates at all in 2015. Employment gains for August and July were revised down by a combined 59,000, the Labor Department said Friday. The government said 136,000 new jobs were created in August instead of 173,000. July's gain was cut to 223,000 from 245,000."

A pretty dismal report. Now we know why the Fed wants to be data dependent -- so they have cover.

AUD & CAD were higher on commodity bid, though AUD just gave up its gains. USD down hard, EUR bid, and JPY showing strength which, along with the strong safe haven bid in CHF, has bearish overtones.

Rocketing higher, lower rates coming. August swing points exceeded, as expected.

WTI crude slightly lower. NG finally hit fresh new lows and may be ready for a rally soon. It's already showing signs of life currently.

Gold and silver bid, with silver the relative strength leader, up 3%.

S&P Outlook:
Futures broke Thursday's low. This combined with the inability of the S&P cash to close above Thursday morning's 1927.21 high could be problematic.

Futures are charting a bit differently than cash (tracing out a possible 5-wave impulse higher), but as always, the cash index matters more to me. Since 1952.89 has yet to be exceeded, the door to new S&P cash lows, possibly below 1867.01, may have just opened.

Yet with the chart of ES futures looking "less bad" than cash, I will give cash the benefit of the doubt above 1897.05.

All I did yesterday was add more TVIX below 12 just before the close. If the market breaks down, so be it. But I'd rather see a market rally crush TVIX below 7 so I can add a lot more.

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