Jobs Report on Tap. Here Are the Levels to Know Now
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Our View
The bear market may not be over, but that’s not stopping bulls from grabbing control of the recent momentum.
In this game, you can do one of two things. You can either be a two-way trader and play both the long and the short side. Or you can stick to one side — either a buyer or a seller.
Over the years, I have seen traders of all sorts who master their preference. But those that master it, know the trend.
Whether you stick to one side or you play both sides of the field, you must know which direction has the path of least resistance. You can’t be a good two-way trader if you can’t figure out the trend and you can’t be a good bull if you’re always buying in a bear market (or a good bear if you’re always selling in an up-market).
In Yesterday’s Our Lean, I said that I couldn’t rule out an early rally, but that “the ES tends to go sideways to down after a big up-day.”
Well? The SPY and QQQ finished within 0.15% of Wednesday’s closing price. That’s as sideways as it can be. The Russell fell 0.25% and the Dow dropped 0.5%.
As for today, it all hinges on the Jobs report.
Our Lean — Danny’s Take
Economists expect 200,000 jobs to be added in the month of November, which would be the lowest monthly jobs gain in two years.
However, is that still too much for the Fed?
“Chairman Jerome Powell suggested in a speech on Wednesday the economy only needs to add around 100,000 new jobs a month to soak up all the new workers entering the labor force. By that measure, the current pace of hiring is far too strong. It’s adding upward pressure on wages and contributing to persistently high inflation.”
I’m not an economist or a macro-guy; I don’t know what the “goldilocks” number for the jobs report is.
We don’t want a hard landing, but we need a slowdown in the labor market. That’s a tough needle to thread, especially as it takes time to work all the rate hikes through the economy.
Our Lean: