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Monday, June 5, 2017

Daily update 6/5 The US Jobs Market - Much Worse Than the Official Data Suggest


A really tiny range day.  The odd thing was that breadth was -60%.  Weakness in the small caps again.  No break out in R2000 yet.  New highs dropped way down to 156.  New lows increased a bit to 36. 

The futures had a very tight range overnight.  They remain outside the upper channel line.

The green count fell considerably for a 3 point down day in SPX. 

With the low VIX and weak internals I suspect this latest breakout of SPX is still on shaky ground.  I think the small caps need to join the party at new highs.  It would also be helpful if the financials and transports would participate on the upside as well.  Despite the big push late last week the market still looks tired to me. 

Lots of people are wondering about why the 10 year rate keeps falling.  Recently there has been more weak hard economic data.  Those two things make perfect sense to me as I don't believe the underlying economy is particularly strong.  It seems to be mystifying a lot of people though.  I still think this might be a last gasp in the economy.  I am not seeing anything so far that contradicts that thought.  Those last gasps can roll over into recession surprisingly quickly sometimes.  We need to remain vigilant.

Longtime readers know I don't like the employment data so I rarely mention it at all.  This is a really good look inside the numbers that clearly explains much better then I ever could why I don't like it.  It is well worth the time to read.  The US Jobs Market - Much Worse Than the Official Data Suggest  The worst thing about this poor economic data is the FED actually uses it for monetary policy decisions.


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