Trading with point and figure

dentist007 said:
dow into the open

x376tc.gif
Click to expand...
18356 held...and pump
excellent
 
** EVENTS PREVIEW **
********************

So to end the week there is an opportunity to refocus on the US, with the leviathan that is the US labour data providing the focal point, which will more than likely render the rest of the day's schedule of statistics little more than statistical roadkill. The latter features the overnight Japan Labour Cash Earnings (best in 6 years in real terms, though flattered by CPI fall, and massive headline base effect, see chart) and the just published German Factory Orders (weaker than expected at -0.4% m/m on a sharp reactive correction fall in Eurozone orders -8.5% m/m), while ahead lies Canadian Unemployment, US & Canadian Trade, and US Consumer Credit. Unsurprisingly the RBA's statement on Monetary Policy (SMP) did little more than flesh out the rationale for its 25 bps rate cut on Tuesday, while hinting at, but certainly not committing to further easing. Friday fun facts: the Bank of England's rate cut was the 666th since the GFC, 666 was ironically the low for the S&P500 in 2009.

** U.S.A. - July Labour data **
- As previously observed, this is but one of many data points to published in the six weeks between now and the next FOMC meeting, per se its implications for Fed policy in 'one-off' terms are limited, but it is a potential short-term volatility or risk event for markets. Headline Payrolls are expected to be fractionally above the 6-month average of 172K at 180K, per stabilizing at solid levels after the roller coaster of the Verizon strike impacted readings in May (+11K) and June (+287K). The anecdotal evidence offers no particular grounds to expect a substantial outlier in either direction, be that the steady ADP reading, another very low 253K reading for Claims in the survey week, or the less reliable pointers from regional and national surveys; but as is more than well documented, this is a highly erratic and often heavily revised series, so surprises are never off the menu. In terms of the household survey, the Unemployment Rate is seen edging down to 4.8% after rebounding to 4.9% on July due a 414K rise in the Workforce, and there will as ever be some focus on the other components, given this survey saw a 347K rise in Unemployment in June, though for Q2 as whole Unemployment fell a net 183K. It has to be stressed that at this level of Employment and Unemployment, and at this stage of the cycle, persistently strong gains in either Payrolls or Employment are rather unlikely. If such gains were seen, they should be a flashing red signal for the FOMC in terms of being 'behind the curve', the more so if they were accompanied by any marked acceleration in wages. Average Hourly Earnings are as ever seen up 0.2% m/m, which would see the y/y rate unchanged at 2.6%, just shy of December's base effect driven cyclical high of 2.7% y/y. The risk on wages growth is increasingly asymmetric for the Fed, in other words it can ill afford to see any material acceleration in this measure while it shilly-shallies on policy. Average Weekly Hours are forecast at an unchanged 34.4 for a sixth month in a row, and per se rather disappointing given a run of 34.5/34.6 from Mar-2014 to Jan-2016, but certainly a reflection of the headwinds from the energy sector.
from Marc Ostwald
 
swissy said:
Any chance of a "Bradley" today, currently short FTSE 6785 :rolleyes:
Click to expand...
possibly...
how ??
a manipulation at or about NFP into rez..preferably 2181 area on spx
market opens at 2.30pm and gets sold..big time

pigs might fly..lol
who knows
 
and still buy the dips on the ftse, I hope that's going to continue for some time...
 
spx edgin up to our 2181 area
2174 first
dow in our 18460 rez/marked premarket
 
Last edited:
US July 2016 Labour report: "No denying visible and underlying strength of labour demand.. divergence trade revival?"

a) Payrolls / Establishment survey - There were "no flies" on this Payrolls report, with another large beat at +255K, and a modest +18K net upward revision to May and June, and the 6-month average turning higher to 189K. Private Payrolls at +215K was again led by Services +201K, with a rebound in Construction +14K and continued strength in Government Payrolls +38K, all underlining a very healthy pace of labour demand.

b) Unemployment Rate / Household Report - While the Unemployment Rate was higher than expected at an unchanged 4.9%, this was wholly due to a further solid rise in the Labour force (+407K vs. June +414K), with Employment up 420K after a lacklustre couple of months. The sole blackspot was the rise in the Underemployment Rate to 9.7% from 9.6%, underlined by a further rise in the long-term (>27 weeks) Unemployed to 2.02 Mln. The latter serves as a timely reminder that governments need to do far more in the way of retraining the long-term unemployed to equip them with skills that are appropriate for the Technological (aka 4th Industrial) Revolution.

c) Average Weekly Hours - An unexpected uptick to 34.5 from 34.4 (+0.5% m/m), with the swing largely attributable to a modest turnaround after a protracted period of contraction in the Mining (i.e. energy) sector, as can be seen in the table below. It would be premature to suggest that this marks a turnaround for the sector, however it will a) likely be less of a drag, and b) suggests that after a protracted period of job shedding, the sector is now rather more efficient. As today's EIA report noted "Oil and natural gas production jobs in May were 26% lower than in October 2014" - see http://www.eia.gov/todayinenergy/detail.cfm?id=27392. A modest 0.1% m/m gain in Manufacturing Hours following a flat m/m reading in June and -0.2% m/m implies a positive July Manufacturing Output reading (due 16 August, last +0.4% m/m). While it is still very early days in Q3, it is worth noting that the Altanta Fed's Q3 GDPnow update yesterday stood at 3.7% SAAR, and this report fits with the strength implied therein, even if the contextual point remains how much, and in which direction Q2 GDP is revised.

d) Average Hourly Earnings - Slightly higher than expected in month on month terms at 0.3%, but unchanged as expected at 2.6% y/y, this is hardly evidence of rising wage pressures, but equally the FOMC should be somewhat wary that it may accelerate further.

e) Market reaction - As the attached chart of the US Dollar index highlights, much of the damage from the BoJ's no show and the much lower than expected Q2 GDP reading has now been unwound, and the pendulum can swing back to entertaining the idea of US rate divergence. However, as noted earlier, there are 45 days until the September FOMC meeting and by extension a truck load of statistics to digest, above and beyond the often dyspeptic tone for 'risk asset' markets between now and US Labour day on 5 September. As for US Treasuries, these have merely unwound the BoE boost, but remain firmly in the 1.45/1.59% range seen since July 25, with the presumed potential for further USD strength and the much higher yields relative to Europe and Japan continuing to rein in anything sharper, in reaction terms. However recent COT data underlines a short-term skew to long UST positions, above all in longer-dated maturities, which a persistent run of stronger data may erode, though the curve flattening move is more than understandable - see charts attached.

-- Weekly Hours and Overall labour data tables below

from Marc Ostwald--
 
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