All the HOOPLA!

Sorry, don't know what's more time consuming, all the headlines about how great the US economy is doing and how everyone here in America is working their coosh high paying jobs or maybe all my time is consumed trying figure out where Lebron James or Carmelo Anthony are going to play basketball next year, that's bad humor on my part, really does not effect me or my family. The truth is, the markets just are not moving much and it makes writing about the markets very tough, plus we had the 4th of July week with no one around to move the financials much at all. I wanted to write something today so my readers do not think I have disappeared again for another year.

So let us catch up on the markets. The one that stands out the most or that has definitely moved the most is OIL. As I write this, OIL is trading below $102 approximately 101.80, it has fallen like a knife through hot butter for the past week dropping more than $6 from the highs. Baffling my mind a tad, considering everything going on in the Middle East and Ukraine. The news has been that more supply is coming from Libya, I am not buying that story. Could it be that demand is suffering from a slowing economy? After all we did see a job report this past Thursday that showed 288,000 new jobs were created here in the States last month and the unemployment level dropped to 6.1%. Maybe we will get some help at the gas pumps, thanks to Libya! Don't get too excited, I really do believe high oil prices are here to stay, no matter what you hear from the media.

While we are still talking about the job report I would like to point out 2 things going on in the markets, that I find very telling. First let us have a look at the US Dollar, I want you to notice on the chart below how it traded back below the 80 level last week and the it got a nice pop after the HEADLINE job number and take notice what has happened since.

Please click on the chart to get the full view. Concentrate on the right hand side of the chart. You see the quick rise to 8060  and now it looks like it wants to go back down below 80 again. I had mentioned a couple of weeks ago that if the $ does indeed trade back below 80, I feel it will have a tough time in the future getting back above that level for some time. Really does bear watching as it does tell us what the world thinks of our Fiscal policies.

Next I will have you take a look at the 10 Year Note. I am sticking with the same theme, if you go back to when I started writing a couple of weeks back, the two main markets I am watching is the $ and the 10 Year Note. Please notice how the bond price fell last week after the HEADLINE job number, yields rose. You see that the price fell to the previous lows just below 124 and have since reversed and we are all the way back to 125.

OK, did you catch me with the HEADLINE in bold print? The point is that if the HEADLINE job number of 288,000 was true to form, the US Dollar would have kept going up and the bond market would have kept falling, meaning that interest rates would be rising because the economy is getting better. Bottom line is, it is just the headline and the media runs with it and the Stock market soared above 17000 for the day. Two things to take away from the job number is the Labor Participation Rate was the worst in 35 years, people are just giving up looking for work! The other thing not talked about on TV is the fact that full time jobs are being lost and more of the jobs being created are part time!

Alright, don't want to dwell too much on the negative so let's move on to a possible bright spot. Gold is trading currently just shy of $1330 and Silver above $21, the thing is they have been at these levels for more than 10 trading days. We need to see a push higher or I am afraid we may set back from here and lose the progress that the metals have made. As for now I would like to see Gold push through 1333 and Silver 2130 and target 1370 in Gold and 25 in Silver first. On the downside I would prefer to see 1314 and 2070 hold as support.

Lastly, yes the Dow Jones cleared 17000 with the job report, we then traded lower to start this week. I have to say, even myself and other well known people who have been bearish for years on stocks are changing their tune and buying into, the FED can keep this market supported after the latest job number. You can't find too many negative things to say about stocks and that is downright scary folks. Let's take it day by day, after all that is the way things should be.

Good Day and Thanks for reading
TraderMartin