Payrolls missed this morning, coming in at 145K versus expectations of 160K. But, the more concerning data was the average hourly earnings which rose only 0.1% MoM and 2.9% YoY.
Futures ignored the miss, as algos were much more focused on USDJPY’s threat to break out and VIX’s latest meltdown.
Those who focus further out than a nanosecond, however, might recognize a potential flaw in the recovery argument. It will be even more obvious next week when December’s inflation data is released.
Stagnating wages amidst rising inflation goes a long way toward explaining why more and more Americans are living paycheck to paycheck.
At least their 401(k) accounts are out of the woods…right?
continued for members…
The red TL connecting the Feb, Apr and Jul 2019 highs is back — meaning DJIA has a decision to make: a reversal or a breakout.
A breakout would almost certainly require a breakdown by VIX below the little red TL at 11.95ish.
If VIX breaks down, ES (which backtested its Jan 2 highs yesterday) should continue to melt up in the absence of any troubling MENA or China headlines. The only one I’ve seen is that the China trade deal might not get signed on Jan 15 after all.
Anything lower than the red midline around 3275ish would spell trouble and, for starters, a likely backtest of the falling white channel.
SPX’s version:
USDJPY has been here before and, in my opinion, has little to lose from breaking above horizontal resistance to tag the red channel line and/or .786.
I think the only thing it’s waiting for is CL/RB’s breakdown.
Note that DXY has given up trying to break down…
…as EURUSD has dropped back through its SMA200 and is now testing its white channel bottom.
UPDATE: 11:12 AM
The midline is holding so far as VIX continues to drop and USDJPY continues to threaten a breakout. I have to run out for a few hours, should be back around 2-3. 
UPDATE: 2:48 PM
SPX’s SMA5 200 has finally caught up with it. Decision time!
