NFP increased by 1.76 million in July, beating estimates of 1.48 million. Futures popped on the news, almost turning green before deciding it was a non-factor – perhaps as Trump had already spilled the beans earlier in the week. Or, perhaps it was due to most of the job gains coming in food service and retail – categories which are susceptible to large downturns if slowdowns and shutdowns continue to make a comeback.

The unemployment rate dropped from 11.1% in June to 10.2% in July, while U6 dropped to 16.5% – still a stunningly large number of unemployed Americans whose benefits have plunged in the past week.

continued for members…

A potential channel?

As usual, much will depend on VIX, which has fallen below and backtested its SMA10 three times. 

The SPX version: Oil and gas have given up all of Wednesday’s gains and have broken minor trend lines. While, aside from a minor bump in DXY, currencies are on the quiet side this morning. The bond market was little changed as the incremental decrease in 10Y rates continues. If the current trend continues, the 10Y will reach its former intraday lows as soon as next week and 1.54bps in mid-October. Note that while DJIA completed a golden cross yesterday, it has yet to reach its June 8 highs. RUT barely topped its June highs, but reversed short of its .786 Fib.Amazon remains in a holding pattern… …while NFLX has a tenuous hold on a sharply rising TL after failing to remain above its 1.618. 1:55 PM

ES keeps trying to break down, only to be rescued time and again. Usually when we see this sort of ramping going on, it’s because a downturn is coming and TPTB want a little more cushion in advance.  Other times, it’s because they want to be able to break to new highs – which I don’t expect in this case.Note that the 10-second plunges in VIX over the past couple of weeks all tie in with a TL which reaches the .886 at 19.86 on Monday. Hmmm… CL and RB have both broken down. And, USDJPY is again tagging the .786 of the falling white channel. Note that this channel intersects the rising white channel (at 100.50ish) in late October. It’s interesting that a TL drawn off these two lows in DXY reach the white .786 and white channel midline – also in late October. Combined with the TNX channel shown above, all roads lead to a major dustup in late October/early November – about the time of the election.  Makes sense, no?

I’m taking off early today to run some errands, but hope to get some more posting done this weekend. Among other charts, I’ll be posting an update on Bitcoin.

Have a great weekend, everyone.