Consider: Friday Was Wrong

Not the actual Employment report, but the Futures market reaction to it. I do not head down this path out in the open often, devising a contrarian view based on macro economic arguments. They come into my brain and most times I try to push them out and just look at price. But there are several points that give credence to this perspective that I wanted to share.

1. The market was not trading higher over the last two weeks based on a view that there would be 60,000 more new jobs than were added.

2. Economists have been pointing out all along that the GDP growth rate does not support a large addition of jobs.

3. Earnings have been driving the market. Did they change Friday?

4. What is the longer run trend of employment (hint: It is not down). Does one month that was over estimated change that? Next months revisions could soak up the difference easily.

5. Weekly jobless claims are also trending lower.

These combined with the large number of bullish looking charts have me firmly in the camp of a small pullback, IF THAT EVEN HAPPENS. The open Monday is likely to be ugly with a lot of selling. I do not doubt that. That is reactionary. How soon after the dip buyers come in will be the key. I do not think it will take long. Maybe just a couple of days, maybe less. I could end up totally wrong, that is what stops are for. We will see.

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