Saturday, December 5, 2009

Unemployment Report Stuns Wall Street but doesn't fool some traders

The Jobs Report stunned Wall Street Friday morning at 8:30am ET. From the trenches, the traders bought the news quickly, many were short ( bearish Daily signal ) and had their stops loosses orders placed above the previous high. This was a classic short squezzed.The Futures spiked up 15 points on the S&P sending shorts running for cover. ( UUUPS ! Ouch ! ,they were DEAD wrong ! LOL )

While this number was tremendous, it also has to be looked at as slightly suspicious. Why?

Mainly due to the fact that we are going into the Holiday Season and a large jump in workers which off set losses was due to temporary jobs. In other words, retailers hiring for seasonal employment going into Black Friday and Christmas ( Low pay NO benefits). This hiring helped reduce the amount of net lost jobs in a major way. There you have it , a very deceiving Jobs Report Mr President.

In addition, 100k people decided to stop looking for work. This comes off the top as once they stop technically looking for work, they are not counted in the unemployment rate which dropped from 10.2% to 10%. Why do people stop looking for work?

Well at some point, especially into the holidays, people tend to throw in the towel ( while others commict suicide) Either it gets too frustrating and depressing to continue to not find work or the holidays are a time to spend it with the kids, wives and extended family, rather than being out hitting the pavement. In any case, the number was very misleading.

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