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Target 4122 12/2/22

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I have set this hourly chart of the ES, S&P 500 24 hour fuguetures, so that you can see the long term trendline extension from the January top through a couple of peaks on the way down. I'll give an overview of that, along with big picture implications, in Monday morning's Technical Trader update. https://liquiditytrader.com/index.php/category/technical-market-timing/ But for now we're looking at 4122 or so. The 5 day cycle projection also points to around 4120. 

The numbers to watch in the premarket are 4080 and 4085. Clearing those should ignite the rocket boosters. 

I would add that I think that bears would only have a shot here if they can keep this rally below 4090. 4085 would be better. 


Meanwhile, Poowell said that the Fed is going to dial back the rate increases to 50 BP from 75, as if the Fed is "setting rates."  Fact is that over the past 6 weeks the bellwether 13 week bill rate has risen by... drumroll please... 50 basis points. In other words, the Fed is still following the market, not leading it.  Note also that neither the 13 week or 4 week bill rates have broken their uptrends. 

Market interest rates are not causes. They are effects. They are meters of monetary tightness. There's no indication in this chart that that tightness is easing. The bull runs in stocks and bonds are swimming upstream. 


Bears Beware, Money Managers Are Finally Spending their RRP Slush Fund November 30,2022

For moron the markets, see:

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BINGO! As reported here  https://liquiditytrader.com/index.php/2022/11/30/bears-beware-money-managers-are-finally-spending-their-rrp-slush-fund/


As for the implications for the current jobs report, you never know because the BLS methodology is so speculative, being based on unsupportable assumptions about seasonal adjustment and the birth and death of businesses. They then fit their previous monthly numbers to actual data for months and years after the fact.

The first release is impressionistic art. Bad, impressionistic art. It only becomes more realistic after they refit their numbers to real numbers derived from unemployment compensation and tax data.  Tax data that we have in real time.

That said, the withholding tax collections for November are about where they were in October. That implies that there was no change in the level of jobs, or maybe some decline, given that there is some wage inflation. That’s the reality. The nonfarm payrolls number is something else.

Dow Jones Marketwatch economists’ survey consensus is for a gain of 200,000 jobs vs. 261,000 reported in October. Based on October withholding, the October number was understated. The BLS often makes up for that in the next month’s number. Bottom line is that the BLS number should meet or beat expectations based on their October number being too low, and the November tax collection level being about the same as at this point in October.

But I reiterate that this is a sideshow. Whatever the BLS reports, and whatever the initial market reaction, the fact is that the market will go on about following the trend that it has already established. Where we need to be focused, is on the fact that the market will continue to get pounded by new supply. That will limit the size and duration of the current rally phases in stocks and bonds. 



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52 minutes ago, Jorma said:

I hate to bring economics stuff up but there is a labor shortage.  Covid has reduced the size of the labor pool. Meaning people who can't work at all and many many of those who can't work as much or as well.



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Playing around with the 60M NQ this morning and musing aloud. Picture perfect 5/8 (blue horizontal line down to green) move down this morning of octave drawn from Wednesday's low to Thursday's high (blue line to blue line).

After a 5/8 move, I look for at least 1/8 or 2/8 counter trend move. So far, we have bounced 2/8+ back up (green line to green line), but let's see if the hourly candle closes above 2/8. After that, it's decision time--the market will either reverse down from that level to attempt to retest support, or continue up past the 2/8 move and keep seeking higher successive 1/8 levels to try eventually to head back up toward the 8/8 (blue) line.

Let's see what happens if we can get to the red line at 11985-ish, which would be a 3/8 retracement. If we don't pause and reverse at 11985-12,000, then it wouldn't shock me if we kept going up and closed at or near green today. But I'm waiting to see how this 60M bar closes. Doesn't look all that great right now.

Charts can be beautiful using the rear view mirror, but man, these swings can be violent. 


Screen Shot 2022-12-02 at 8.32.52 AM.png

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