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« Weighing the Week Ahead: How Full is the Glass? | Main | Conspiracy Refuted »

June 30, 2010

Comments

online survey jobs

As we would observe the employement activity it's definitely low, this is still I think the effect of recession.

oldprof

Andrew -- Thanks for sharing your research. I do not have a study to share with you, only my experience over the last few years.

On days when the number is ostensibly good, there is always some kind of selling. CNBC gets an email bombardment from those with objections of one sort or another. The report is so complex and everyone hates the government. It is easy to raise doubts.

That is why there is always a good chance to cover. If the report is bad, the market just sells off.

I have been following this report for over twenty years, in much more detail than most, and I am really trying to share something that a few might find useful.

It works better if you are trading a futures account, since some of the action comes before the stock market opening.

Thanks again for good data, and a great comment.

Jeff

Mike C

If we close a couple of points below 1040, the next stop is 20% lower)

There is a pretty strong support level at 940-950. I think that is the next stop. The next is at 870-880 which in my opinion has monster support. It is also the typical correction magnitude (25-30%) following the rally (+80%) after a market crash (-60%). 870-880 is also an attractive valuation level. For now, I am hedged having bought SDS yesterday when the S&P was still above 1040.

The trend is clearly down, and we are in the period of historical seasonal weakness. History would say to look for a bottom in the Sep/Oct timeframe. IMO, one gets 100% long if and when the S&P hits 870-880 in the Sep/Oct time frame. The average investor seems to me often has no plan and is completely reactionary in the moment.

Andrew

Why is the best way to play it as "usual" to be short going in? I just looked at SP numbers over the last few years both on an aggregate and individual year basis. The median 1-day return is higher for every time period when comparing the first Friday of the month to all 1-day returns in the same time period. Additionally, the percent positive is higher under all time periods. The difference in the maximum drop for the day was statistically insignificant for most time periods.

Only the average return for 2010 was lower and this is due solely to last month's 1-day change. The returns have been negative the last 2 releases.

The time periods I looked at were 2010, 2009, 2008, last 3 years, and last 5 years. I'm assuming that unemployment has been released on the first Friday every month.

Limitations of my quick study:
I just looked at the returns - I did not focus on whether or not the jobs report beat expectations (I didn't have the data or I would've) or any other factors such as what the market did the previous day or if the market was oversold/overbought going into it. Finally, perhaps your statement wasn't for the entire day just the morning and I do not have the data of minute-by-minute ticks to do that analysis...but would love to see it. Then again, I'm not a day trader.

I'm not trying to be jerk - I really love your blog and respect your knowledge. I'm just trying to understand in case I'm missing something. Thank you for all you do.

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