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Trend table status

Trend

SP-500

R2000

COMPX

Primary

Up 7/31/20

Up 1/29/21

Up 5/29/20

Intermediate

Up 10/2/20

Up 8/21/20

? 3/26/21

Sub-Intermediate

Up 3/29/21

?- 4/5/21

? 4/1/21

Short term

Up 4/1/21

Up 4/5/21

Up 4/1/21


Don Worden of Worden Brothers (makers of Telechart software) used to keep a trend table before his health issues got in the way. I always found it useful. Mine is slightly different. Hopefully helpful. Up? or Dn? means loss of momentum. ? by itself means trend is neutral. ?+ or ?- means trend is neutral with bias of up(+) or down (-)

Monday, September 10, 2012

Employment

There was a big drop in online help wanted ads in July and again in Aug.  Check out this chart.


July's number was the biggest decline since 2008.  Notice how the labor market started to deteriorate the second month after the very negative reading.  Both the July and Aug. numbers are at the lowest numbers since the recession ended in 2009.  The data set is a little noisy and not exactly perfectly correlated to the payroll number.  However, the last time we got such a negative number it was an early warning of future trouble in the labor market.  We will just have to wait and see what happens.  If this series puts in more negative months this fall it could be a negative for employment.

I thought this was kind of an interesting chart.  The article I got this from said this was good news for the labor market.

Source

Announced layoffs took a tumble in the last month.  You would think that would be good for the labor market wouldn't you.  If you haven't yet, take a closer look at this chart before reading on.

That survey looks like useless data to me, LOL.  In 1995 it spiked down as jobless claims started to rise.  In the period from 1997-99 there was a big surge in the survey with no real increase in jobless claims.  In 2000 it spiked down again as jobless claims were already on the rise.  There certainly was no real warning in 2008 of what was to come in the jobless claims.  A lot of layoff announcements does not necessarily mean a lot of layoffs are coming.  While a lack of announcements does not necessarily mean all is well.  It does show that sometimes companies seem to feel good about their labor force right before things start going down hill.

The recent manufacturing data suggests that there could be some layoffs down the road.  The online ads also seem to indicate that possibility.  I guess we will have to wait and see what happens.

I thought this was an interesting chart of the big picture employment problem


The linear regression line through the employment to population ratio is not valid in my mind.  The big jump up in the percentage of people working was caused by the large influx of women into the work force.  Obviously that is not going to continue at the same rate into the future.  This is the kind of stuff you get from economists sometimes that drives engineer types like me crazy, LOL.  This chart does show how far off we are from where we were before the last recession.  Clearly the number of jobs created has not even been close to keeping up with the number of people reaching working age.  Politicians in office get on TV and tell us how things are getting better, but is that really the case.  I guess if the population stopped growing you could say that, but it is not reality.  Of course politicians not in office are glad to point out problems like this.  However, they never seem to come up with credible plans to fix it. This problem will continue to exist until we, as a society, realize and deal with the debt problem.  I hope I live long enough to see that time.  There are some interesting observations in the article.  There are also some political comments, which is a bit unusual from this author.  I guess election years can do that, LOL.  Here is the link http://www.streettalklive.com/daily-x-change/1184-employment-report-worse-than-it-looks.html.

There was an interesting take on QE in the article. 

As far as QE 3 from the FOMC next week - the week employment data certainly provides an argument for further "accommodative action" at the next meeting.  However, where the media and the markets are mistaken, is that "accommodative action" does not necessarily mean "QE".  Balance sheet expansion programs have shown no direct impact on employment.  However, what these programs have done is boost inflationary pressures and interest rates. With the financial markets making new highs for the year, inflationary pressuress mounting and interest rates at low levels - it is likely that the Fed will remain with more traditional policy at the next meeting such as extending the ultra-low rate environment through 2015.  This would be the most logical course of action considering that a bulk of the impact from a further QE program is already priced into the market.  With each program having a diminishing rate of return I expect that he will reserve his "bazooka" for later this year, or early 2013, when the economy is on the brink of a recession or there is a threat of a systemic event.   Both are very likely to happen.

This makes sense to me.  I don't see a balance sheet expansion given the surge in commodity prices based on the theory there would be QE.  Especially with SPX at bull market highs.  Bernanke has mentioned before he feels there are other accommodation measures that are not QE. I guess we will see later this week.

Bob

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