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Thursday, December 1, 2016

Daily update 12/1 A Tale of Two Job Markets

Downside follow through.

Volume was heavy once again.  It was not a negative day across the board though.  The Dow, transports, and financials were pretty strong.  More rotation going on.  Breadth was -60%.  New highs were up a bit from yesterday at 234.  New lows picked up dramatically to 115 as bonds had a bad day in general.  SPX held the key 2190-93 support area mentioned recently.  The dip buyers generated several bounces intraday from support.  However, each one but the last one at the end of the day were sold into.  The market closing saved the last bounce.  I can't say that the selling was over.

The futures found support at the 50 SMA.  Will this line provide support or not?

The red line crossed above the green, but is still a bit below 50.  The bears are making an attempt to take control.

The short term bull pressure lines crossed negative today.  More disturbing for bulls is that the long term lines also crossed.  That is one day after making a new intraday high.  That is probably not a good thing.  While this move up looks good on the daily chart the bull pressure chart shows this rally much weaker then the summer break out.   None of the lines eclipsed their prior red spikes.  If history is any guide it seems likely SPX is headed for a test of the last low.

The chart of the day goes to the SOX.

WTF!  That is nearly a 5% decline in one day.  All I could find today were comments about a rotation out of tech and into financials.  I noticed the smack down early in the day and I tried to listen to CNBC a little closer to see if there was any reason why.  Not only did I not hear of any reason they never even mentioned it was happening.   I think this was the most significant thing that happened today and it was not even worth a mention.  That is one hell of a rotation if that was all it was.  Maybe it is just a one day wonder on the downside.  I have been doing this a long time and I can't recall ever seeing a major sector get creamed like this and nobody cared enough to mention it.  Here is my theory.  All the money managers and traders they feature during the day were heavily long NVDA (they have been hyping for a long time) and other semi stocks and didn't want to panic other investors.  They were all probably selling like crazy off camera.  Is this nothing but a buying op or the start of big trouble in this sector?  I will be keeping a close eye on the SOX over the next few days to see what happens there

SPX held support today, but internals are getting negative fast.  I don't have a lot of confidence this support will hold.  Yesterday I was caught up looking at NDX and failed to realize COMPX turned its short term trend to neutral.  Today it turned down while SPX and R2000 went neutral.  Will the bears come out to play again tomorrow? 

We get the employment report n the morning, but at this point I don't know that it matters much.  The FED is going to raise rates at the next meeting unless some catastrophe happens.. 

So far I have to say this action looks consistent with the idea this move was a final blow off top.  Stay tuned.

This is an interesting article on the jobs created in this recovery.  A Tale of Two Job Markets

A striking picture of this lopsided reality is evident from the shares of the total job gains since the November 2007 pre-recession peak in employment. As the chart shows, of the five-million-plus net jobs added since that high-water mark nine years ago, some 56% went to Hispanics (rightmost green bar), about quadruple their 14% share of the labor force at the time (rightmost blue bar). Meanwhile, 29% of those job gains went to Asians, i.e., about six times their 5% share of the labor force (second set of bars from left). Moreover, 25% of those job gains went to Blacks, i.e., more than double their 11% share of the labor force (third set of bars from left).

In sharp contrast, Whites, who made up over 81% of the labor force in 2007 (leftmost blue bar) accounted for negative 9% of the net job gains (red bar). While the percentage shares for these four groups add up to more than 100% because White Hispanics are double-counted as both White and Hispanic, and Black Hispanics are double-counted as both Black and Hispanic, the reality is stark. Whites actually have fewer jobs than nine years ago, while Hispanics, Blacks and Asians together gained all of the net jobs added, and more. 


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