Jobs, Jobs, And Less Jobs…

By Red, on July 1st, 2010

… unless you want to clean up an oil spill for BP of course.

Yes, the numbers were horrible today… for the Continuing Claims and Initial Claims that is. Tomorrow has the Nonfarm Payroll and Unemployment Rate, which should be just as bad. But, we are very oversold right now, so I’m expecting a sell off first, then a rally.

We went down to within 41 cents of the 100.72 spy fake print, before reversing hard into the close. I still think a down move to the 990 area is coming, but not tomorrow. I think the move down in the morning will only put in a higher low, and then rally the rest of the day, closing positive.

There is a lot of resistance in the 1040 area now, and I think that will stop the advance tomorrow, and could be the closing price too? However, I have a fake print of 1070.50 too, and should 1040 not hold back the bulls… a massive short squeeze could happen, taking us up to that level.

Now don’t get me wrong, I don’t think we will hit that target tomorrow… but anything is possible, so keep that in mind. I feel like we will hit 1040, and close around there, then hit 1070 next week, at which point I would go short again.

But let’s just play it one day at a time. For tomorrow, a possible down move early in the morning on jobs data and rally the rest of the day is my forecast for Friday.

Good luck everyone…

Red

Weekend Update...

CarvonLi

i guess so.

http://www.reddragonleo.com Red Dragon Leo

I'm always guessing, but sometimes I get one right.

CarvonLi

but i just can see 1040 and 1060.

http://www.reddragonleo.com Red Dragon Leo

The fake print of 1070.50 spx is there for a reason. It's where they plan to take the market too… but “when” is unknown? So the 1040 area is obvious to everyone, as it was major support… now resistance.

The 1070 area isn't obvious to everyone, but besides the fake print, there is also a gap around that area that needs to be filled. Look closely at the big red bar down on this 60 minute chart, that fell from the 1080 area on June 28th.

http://reddragonleo.com/wp-content/uploads/2010…
http://myequitytrades.blogspot.com/ Jason_70

I may be a little too optimistic here, but i see 1100-1150, http://myequitytrades.blogspot.com/2010/07/long…

Let's see…

http://www.reddragonleo.com Red Dragon Leo

I have a fake print of 112.41 spy, which could be reached before falling back down again. However, if tomorrow only reaches 1040 and closes there, it would go into the weekend overbought on the 60 and 15 minute charts.

That leaves the possibility that next Tuesday could drop down to the 990 area, for one final low before a larger rally back up to at least the 1070.50 fake print, or even the 112.41 spy print?

I don't see 1150 though… too high for now, but 1100 is certainly possible. The high will like be on opx for this month, or the following Monday.

As long as we stay under the 1131 right shoulder high, I think the market will continue down for several months, as the monthly and weekly charts tell me that we have started Primary Wave 3 down.

Optimism is good, but staying in the game and make some money is better. Good luck too you, if you decide to stay long waiting on 1150. I'm bailing at 1070, and then 112.41… if it looks like it's still got more upside left in it?

monicadern

cool video red – thanks! I am flat,
http://www.reddragonleo.com Red Dragon Leo

Mr. Topsteps latest….

http://www.youtube.com/watch?v=6FKw0XuiVP0
TrappedBetween

http://enjoythe4th.blogspot.com/

Al

Very interesting indeed. Thanks for sharing.

http://niftychartsandpatterns.blogspot.com anoopsan

EUR/USD after breaking out is taking a pause
http://niftychartsandpatterns.blogspot.com/2010…
http://www.reddragonleo.com Red Dragon Leo

Good Morning Gang…

The jobless rate fell to 9.5%, from 9.7%… but they lost 125,000 jobs in June. So, it's bad as expected, but the pre-market isn't tanking right now.

That means the rally for today is probably on. If you want to play the long side today, I'd look for an early morning dip. The upside target for today is 1040.

Or, just take the day off, as after the first hour or so, the market should go to sleep as everone leaves for the holiday weekend.

http://www.hotoptionbabe.com Anna

129,000 to be exact

http://www.reddragonleo.com Red Dragon Leo

Oh, OK… I just seen 125,000 on the front page of cnbc.com. I guess they quoted it wrong?

Rip Van Trader

Hey, in the Soviet Union everybody had a job, a fact much admired by PBO, I'm afraid.

http://www.reddragonleo.com Red Dragon Leo

Well, this country is getting more and more closer to becoming just like the Soviet Union, nothing surprise me anymore.

http://www.reddragonleo.com Red Dragon Leo

Good Morning Gang…

The jobless rate fell to 9.5%, from 9.7%… but they lost 125,000 jobs in June. So, it's bad as expected, but the pre-market isn't tanking right now.

That means the rally for today is probably on. If you want to play the long side today, I'd look for an early morning dip. The upside target for today is 1040.

Or, just take the day off, as after the first hour or so, the market should go to sleep as everone leaves for the holiday weekend.
http://crashthemachine.wordpress.com/ pezhead9000

http://www.bls.gov/news.release/empsit.nr0.htm

“Among the marginally attached, there were 1.2 million discouraged
workers in June, up by 414,000 from a year earlier”

http://www.reddragonleo.com Red Dragon Leo

The question is… do you even believe those numbers to be accurate? It's probably worst then that in reality.

Dumbocracy

ah, and there's rub, yes? most economists, real ones who aren't bought and paid for by the establishment, say the unemployment rate is more likely at 18%. Esp because so many people have just given up looking and are no longer drawing unemployment

http://crashthemachine.wordpress.com/ pezhead9000

http://www.shadowstats.com/alternate_data/unemp…

http://www.reddragonleo.com Red Dragon Leo

LOL… yeah, that shows about 17% or 22% as the real unemployment numbers.

http://www.hotoptionbabe.com Anna

BTW CNBC said 129,000 on tv now its 125, 000

Dumbocracy

You and I are on the same page at the same time Pez! LOL

http://crashthemachine.wordpress.com/ pezhead9000

hahaha – i need to take another anti-depressant

http://niftychartsandpatterns.blogspot.com anoopsan

Second attempt to conquer the cloud resistance
http://niftychartsandpatterns.blogspot.com/2010…
Dumbocracy

You know, Red makes comments sometimes about feeling too negative but I think we should view this whole recession(depression actually) from the standpoint that pruning is necessary. It is unfortunate that it is at the expense, money, and stress of so many of the “little guys” but that is what happens when people, no matter what economic level, don't stick to basic fundamental principals of money management. I.E. over spending, use of “bad” debt etc etc
People need to trim the fat, remember what made us a great nation, (deferred gratification, hard work, etc) and get to it. That is, if we haven't passed the point of no return, collectively as a society. Japan and Germany were at rock bottom though and look at them now. Not perfect, but waaaaay better than they were post war.

Ok, that sounded really preachy didn't it.

http://www.reddragonleo.com Red Dragon Leo

Well thanks Dumbocracy…

I'm actually a very positive and upbeat person. I've just been caught up in this depression crap, and seen too much negative information… hence the reason I write about it so much.

The good news is, I don't think the world will end in 2012 as many may believe. In fact, I think the Illuminati enslavement of mankind will end, and the sheep will finally be free.

But, I usually make posts on those subjects when the market is slow, and I don't have anything else to write about. Here lately though, it's finally starting to get exciting, as another move down is coming next week… after we go up to 1070 for the gap fill and backtest.

Things are looking up for the bears I believe…

Dumbocracy

That certainly wasn't a jab at you Red. I get that you are a fundamentally upbeat person. I am merely stating the obvious that money can be made in a bear market and like you said things are looking up(or down, hopefully) for the bears.

Just meant to say, that though it is engineered by the puppeteers, maybe the shock will be healthy and reorient people's responsibility meters…

http://www.reddragonleo.com Red Dragon Leo

No… I knew that. I was saying “thank you” for posting that. Many others think I'm too negative on my posts sometimes. I just tell it like it is… and it's really bad out there right now.

http://www.reddragonleo.com Red Dragon Leo

Doesn't look like there is going to be any dip to go long today, so you might want to stand aside. I personally don't want to ever chase a tape. However, it could pull back and fill the morning gap, and then run higher the rest of the day.
http://crashthemachine.wordpress.com/ pezhead9000

gap closed
jimhobson

So far very interesting. Got out of spxu and vxx at open but of course now having second thoughts.

I see a bounce to 1050-1060 but maybe the markets are just too scared now..

Will sit aside w/ mostly cash today i guess. Still have drv tza with such low base i will ride.

http://www.reddragonleo.com Red Dragon Leo

Good idea Jim…

I'm sitting in cash too. I don't know if it will rally or not? The charts are mixed, so it's best to wait for a better setup next week.

http://www.reddragonleo.com Red Dragon Leo

Gang the 60 and the 15 minute charts are now looking like they are going to roll over today. We could have a big sell off into the close, instead of a rally. I'd close any long up now… for anyone brave enough to go long today.

bigbadwolfusa

I'm sticking with my pick…kangaroo tail…I think we just hit bottom…I was looking for 102.36..38..but 102.46 is good …not up for the day…

http://www.reddragonleo.com Red Dragon Leo

It's just looking pretty weak, so I'd rather sit on the sidelines right now. I still think we are going up to 1070, but I don't know if that starts from here, or from 990?

bigbadwolfusa

I agree we goto fill the gap @ 107 and of course I believe it started yesterday…so far so good….move my stop up to break even…102.28

http://niftychartsandpatterns.blogspot.com anoopsan

Dow Jones inverted head and shoulders and 50 hour moving average resistance
http://niftychartsandpatterns.blogspot.com/2010…
Dumbocracy

Was just looking at this H&S on dow …

http://cdn.forexfactory.com/attachment.php?atta…
http://www.reddragonleo.com Red Dragon Leo

This thing looks ready to roll over at anytime now. Just don't know if they will allow it to do so today… going into the 4th and all? With the light volume, they could hold it up all day?
http://niftychartsandpatterns.blogspot.com anoopsan

The death cross is here in S&P 500
http://niftychartsandpatterns.blogspot.com/2010…
http://www.reddragonleo.com Red Dragon Leo

Since none of the selling is sticking, I'd say that we will dip down below the zero level on the 15 minute chart, and curl back up into the close. If that happens, then there should be a rally then, as the 15 and the 60 will be pushing the market up.

Right now, the 15 is pushing down and the 60 is pushing up. That's why we are trading in this range. Once the 15 resets, and push back up, they will be aligned together and allow the market to rise higher.

The light volume, as all the traders are probably leaving for the weekend right now, will also help allow the market to rise… as there won't be any selling pressure left.
http://niftychartsandpatterns.blogspot.com anoopsan

S&P 500 Hour Channel
http://niftychartsandpatterns.blogspot.com/2010…

http://www.reddragonleo.com Red Dragon Leo

You thinking it's going to breakout to the upside, or fail and fall back down?

http://niftychartsandpatterns.blogspot.com anoopsan

at this point it may not break out. But if the low 1010 is not breached a move towards 1040 is possible still staying within the channel.
jimhobson

I remember throughout 09 overbought signal remained seemingly forever before Oct hit.

Oversold signals can do the same.

http://www.reddragonleo.com Red Dragon Leo

Yeah… it's seems more likely that we crash today, instead rally. Go figure? Just goes to show you how hard it is to predict the market. LOL

jimhobson

This is weird in my book. Vixes are still negative. This is going to turn in a bit.

http://www.reddragonleo.com Red Dragon Leo

Turn up, or down?

Iamtheeggman

It can drift down on low volume like it used to drift up. I am in cash now although my GUESS is that we may go even lower. However, I will accept my loss and move on. I have been short a long time and was hoping to break even. I came close. Lesson learned: Stay away from levered funds.

jimhobson

In this last drop i have made over 300,000 in leveraged funds.

They are a great instrument=ment if you understand how to play the game.

You must get good at setting stops and using the moving averages.
if you do you will not lose.

Iamtheggman

you are my idle.

jimhobson

Vixes are neg so it should bounce a bit.

Bought a little TNA just now just in case.

http://niftychartsandpatterns.blogspot.com anoopsan

Triangle in half hour chart
http://niftychartsandpatterns.blogspot.com/2010…
http://www.reddragonleo.com Red Dragon Leo

With today's light volume, I really expected it to go higher. Strange?

IlliniKap

Red, its because for the first time since this entire rally from March 09, the Bears are finally in control and in the drivers seats. Expect the opposite. Instead of buy programs we now have sell programs that are kicking in.
jimhobson

I still do wait till after 3PM

http://www.reddragonleo.com Red Dragon Leo

Seems strange that they didn't rally up today. Maybe they will into the close?

jimhobson

Well here we go and iam not holding longs through weekend TNA and SSO

http://www.reddragonleo.com Red Dragon Leo

We are going to 102.81 spy, a fake print I seen earlier.
Hackswell

Is 1028.09 close enough for you? @15:40
http://www.reddragonleo.com Red Dragon Leo

Close enough for me… LOL

http://www.reddragonleo.com Red Dragon Leo

Seems strange that they didn't rally up today. Maybe they will into the close?
http://www.reddragonleo.com Red Dragon Leo

Close enough for me… LOL
jimhobson

Thats riot made a quick 1% on tna and sso. one of the shortest bounces ever.

http://www.reddragonleo.com Red Dragon Leo

Hit that 102.81 spy fake print and reversed… LOL

Sir Woody Hackswell

Now… if only my C fake print comes into play next week. $3.317 here we come!

http://www.reddragonleo.com Red Dragon Leo

It probably will Woody… I wonder where the SPY will be in relation to that citigroup print?

Sir Woody Hackswell

About 15% lower, just on ratios.
http://www.reddragonleo.com Red Dragon Leo

Holy cow! That's quite a dump on the SPY…
http://crashthemachine.wordpress.com/ pezhead9000

i'm at work and nobody's here, I was watching the 5min spy chart. flush….
Sir Woody Hackswell

C was ~3.80 when I saw the FP. 3.32/3.80 = ~12.5% (sorry… not 15%).
IF (big if), SPX goes down same amount that would be 1045 * 0.875 = ~915.
HOWEVER, it may not be the whole SPX… it might just be a sector Fake Print? For financials?

jimhobson

This market tanks next week.
http://crashthemachine.wordpress.com/ pezhead9000

flush, swirl, swirl
IlliniKap

all the big guys sold the cash close – - Goldman, Chicago Corp., UBS, all of em

http://www.reddragonleo.com Red Dragon Leo

Good to hear that IlliniKap… makes me more comfortable being short now.

http://www.reddragonleo.com Red Dragon Leo

LISTEN EVERYONE…

Keep your eye's open on all charts, and all news sites for fake prints over the weekend. That last sell off into the close was very bearish. We could gap down hard on Tuesday, and I'd like to know where the bottom is… maybe they will tell us?

newbear

Red the short side of the trade makes most sense right now, that scares me.

http://www.reddragonleo.com Red Dragon Leo

Yeah… it scares me too. I'm short over the weekend, and I keep thinking we are going to get a short squeeze… but it hasn't happened yet? Strange… and scary.

newbear

BTW my mailbox was full it's now cleaned up.

http://www.reddragonleo.com Red Dragon Leo

Ok, Anna's was too… I had to clean mine out as well. Nothing new, but I'm expecting Tuesday to be down… I'll keep you informed.

newbear

It seems everyone on the bloshpere is now very bearish as if it's a done deal. That concerns me most.

http://www.reddragonleo.com Red Dragon Leo

That scares me too, but all the charts point to a gap down Tuesday. Man… I hope the charts are right for once.
http://www.hotoptionbabe.com Anna

I think we rally hard on tuesday or wednesday everything is way over sold along w/the CPCE ratio, a sure sign of a rally, and a short term bottom is in

http://pitch3.zstock7.com/ zstock7 Pro Select!

CME, more downside,
http://zstock7.com/wp-content/uploads/2010/07/c…
bensjoyce

From Alphhorne's blog, I'm saving this. It seems very useful ie CCI 233

What I have found to be the best leading indicator for equities is the $TNX (10 year treasury note yield) and the associated indicators that you will see on the chart below. On a daily chart (this is true for ALMOST ANY STOCK TOO!) the CCI 233 is a must indicator! When it breaks below 100, it marks a change in the trend. Now, although that is a trailing indicator in terms of the $TNX, it is generally a LEADING indicator in terms of equities -SEE THE RED VERTICAL LINE! For those of you who want to continue to day trade, this chart can also alert you to daily trend changes. Read notes 1,2, and 3 and remember how I pointed to this Tuesday's drop Monday night before it happened by highlighting the previous day's negative divergence between the $TNX, which was down 2.3% and the equities, which were flat to up http://alphahorn.blogspot.com/2010/06/monday-wr….
Jaywiz10534

Breaking thru the 50/200 day crossover is about to HIT HARD from the 16th to 30th This month. From there we can get some WILD SWINGS
with lower lows until OCTOBER 4th- Stan Harley for one, has it pegged
as a critical LOW this year and I for TWO, agree with that analysis.
BUT THE BIG $$ is about to be handed to the BEARS-
After Jly 30, we can still expect ONE more DIP to Aug10th before swinging in vicious bear mkt fashion, but each rally until OCT4th is ONLY a rebound within a declining trend .
http://jaywiz.blogspot.com
DAILY EKG after 90 days NOW at 69.6% SUCCESSFUL

http://www.reddragonleo.com Red Dragon Leo

Thanks for the update Jay. Happy 4th of July to you and your family… and all your blog posters too. You've got a good group there now it seems.

http://rosabarba.livejournal.com Rosabarba

Hi Red,

Something else to watch: The 75-week MA. Very clean support/resistance throughout the major bull/bear phases of the market for almost two decades. Tested this week and currently at 1013.50, near major fib levels from both the '07-'09 plunge and the '09-'10 bounce.

Just one more piece that argues for a bounce here, whether we're in bear or bull, short term. If we get a bounce, it might be worth monitoring that MA to see if it provides support along its currently upsloping trajectory (in which case bears should probably be careful) or if that line is broken on a closing basis and holds, in which case it may provide a useful risk-reward point for initiating new shorts (in addition to the shorter-term MAs).

http://pitch3.zstock7.com/ zstock7 Pro Select!

Hi Rosabarba,
Something else to watch!
QQQQ 40.4 is a 20% correction. QQQQ under 40.4, signals a double dip recession.

http://rosabarba.livejournal.com Rosabarba

Hi z,

The 75wsma isn't quite as clean for $COMPQ as $SPX, but it is close.

Currently for the Qs it's 40.25, which is in the same ballpark you're indicating.

http://pitch3.zstock7.com/ zstock7 Pro Select!

QQQQ fibs, are coming into to ” do or die, territory.
http://zstock7.com/wp-content/uploads/2010/07/q…

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