Jobs Reports missed by 110,000

**tsptalk** · 04-01-2005, 02:37 PM

I post this about once a month. What the market has done in the past when thereis a surprise in the jobs report. This report missed by 110,000. There were 110,000 fewer jobs created in March than estimated.

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During the past three years:

[align=left]Three days after a large surprise in the jobs report of 50,000 jobs, up or down, the S&P 500 was higher only 5 out of 18 times. Its average return was minus 0.5%. Markets donâ€™t like surprises because they create uncertainty.
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[align=left]Ten days after a negative surprise of 50K jobs or more, the S&P was higher 55% of the time. Ten days after a positive surprise of 50K or more, it was lower 58% of the time.
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[align=left]Ninety days after a large negative surprise, the S&P showed an average return of +5.1%. Ninety days after a large positive surprise, its average return was 1.7%.
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[align=left]The correlation between surprises in the jobs number and 90-day returns in the S&P 500 has been -.32. This means that the more positive the surprise, the more negative the performance in the S&P and vice-versa. Given the sample size, this is significant.
And, perhaps most important of allâ€¦
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[align=left]If the market did cartwheels for the jobs report and closed higher by 0.5% or more, there was only a 33% chance that is was still higher 30 days later. If it fell out of bed and declined by 0.5% or more, there was a 93% chance of it being higher after 30 days.

source http://www.sentimentrader.com[/align]

**ou81200** · 04-01-2005, 04:38 PM

Tom---

When you say days. Do you mean business days.

Thanks.

**tsptalk** · 04-01-2005, 06:55 PM

Yes.

**coolhand** · 04-01-2005, 08:17 PM

That's good to know information Tom. Sounds like the middle of next week couldbe a good time to invest.

I was a littlesurprised that you moved100% out of G to equities in one daygiven how sensitive the market is. I held back 40%. I like the idea of phased investing in a market like this, otherwise known as hedging your bet.

It looks like a good portion of the gains made a couple days agoare going to evaporate today. At least in large measure (C is down .95% and S is down .6% as I write this). There is not a lot of data being released next week and briefing.com shows its release won't happen till Thursday. I wonder if we can rally prior to that time with no apparent catalyst.

Here's what briefing.com says about April's historical trend

http://www.briefing.com/Silver/InDepth/StoryStocks.htm

**tsptalk** · 04-02-2005, 06:17 AM

coolhand wrote:

I was a littlesurprised that you moved100% out of G to equities in one daygiven how sensitive the market is. I held back 40%. I like the idea of phased investing in a market like this, otherwise known as hedging your bet.

Yeah, it was a tough call. As I mentioned in Friday's comments, some lows test the bottom a second time, some are just big "V" bottoms. I had to make a call the other day. If I didn't and it was a "V" I could have missed achunk of the gain while hoping for a pullback.

If my indicators weren't telling me that we that a bottom is screaming here, I would have waited. Turns out we will likely test 1163, and maybe penetrate it just for a panic bottom, then head up.

If anyone is still out looking to get in, the best case scenario is a sell off at the open Monday followed by a reversal sometime during the day. But it's not always that clean.

**CSI** · 04-02-2005, 12:23 PM

I moved all in for the C fund for Monday. I'm hoping that what you said will happen, a minor selloff Monday morning followed by a rally. It is hard picking a bottom. What I think will happen on Monday is the DOW and NASDAQ will lead down followed by a smaller down by the S&P 500. I hope it is enough for the smart money, which I think has been on the sidelines the last couple of weeks, to step up to the plate and start buying. I like playing the I fund, but I do not think it is the place to be early next week, may move some or all in Wed or Thursday depending on what the S&P 500 does on Monday & Tuesday. Best of luck to everyone next week.

**IBD Fan** · 04-02-2005, 10:36 PM

tsptalk wrote:

coolhand wrote:

I was a littlesurprised that you moved100% out of G to equities in one daygiven how sensitive the market is. I held back 40%. I like the idea of phased investing in a market like this, otherwise known as hedging your bet.

Yeah, it was a tough call. As I mentioned in Friday's comments, some lows test the bottom a second time, some are just big "V" bottoms. I had to make a call the other day. If I didn't and it was a "V" I could have missed achunk of the gain while hoping for a pullback.

If my indicators weren't telling me that we that a bottom is screaming here, I would have waited. Turns out we will likely test 1163, and maybe penetrate it just for a panic bottom, then head up.

If anyone is still out looking to get in, the best case scenario is a sell off at the open Monday followed by a reversal sometime during the day. But it's not always that clean.

Isnt the big surprise factor - crude oil prices and the action in the energy market. If all things were equal, we would have probably have the market performing in a more expected pattern and it would be rising instead of falling. Dont think the price rises have been factored into the market, therfore every time the price goes up there will be the adverse reaction in the markets that if all other things remain equal.

**coolhand** · 04-03-2005, 12:02 AM

You're right IBD Fan. There is no question thatcrude is putting a damper on the market. It shot up on Friday big time. http://tinyurl.com/5zzoe

The Goldman Sachs study was a driver, as is speculation concerning supply and demand. Inflation will continue to be a concern moving forward if crude stays at elevated levels (whatever that means in the future...$105/pbl :shock

.

I'm not buying into that scenario yet, but I'm not so sure the market can rally a whole lot under these conditions. At least not a sustained rally.DOW theory says the market prices in anticipated market conditions monthsahead of time. The volatility of crude introduces a lot of uncertainty. Just something to think about.

**Skip** · 04-03-2005, 03:08 AM

Once everyone realized that a lower job report ment that the feds would only raise interest rates1/4 point because of the slower growth in jobs the market came off of the lows.:^ Also the Jan low held as support...

Skip

**coolhand** · 04-03-2005, 03:27 AM

Skip wrote:

Once everyone realized that a lower job report ment that the feds would only raise interest rates1/4 point because of the slower growth in jobs the market came off of the lows.:^ Also the Jan low held as support...

Skip

Yeah, I realized almost immediately that the market would see the jobs report as relatively good news since "measured" rate hikes would continue.

The Jan low may have held, but if crude continues its upward movement how long can it last? If it backs off next week I think we may get our rally. I've got my fingers crossed :!.

**robo** · 04-03-2005, 04:59 AM

Hey Coolhand,

I think oil has to start going down soon. Goldman Sachs is way out in left field!!!!
I remember when they thought the NASDAQ would go to 10,000. I'm glad I wasn't in Tech when the party was over. I think the same thing will happen to oil. Back between 40 and 50 a barrel, not 57 to 100.

**Skip** · 04-03-2005, 05:15 AM

coolhand wrote:

Skip wrote:

Once everyone realized that a lower job report ment that the feds would only raise interest rates1/4 point because of the slower growth in jobs the market came off of the lows.:^ Also the Jan low held as support...

Skip

Yeah, I realized almost immediately that the market would see the jobs report as relatively good news since "measured" rate hikes would continue.

The Jan low may have held, but if crude continues its upward movement how long can it last? If it backs off next week I think we may get our rally. I've got my fingers crossed :!.

Till G/S sells their oil... I think they got caught long when oil pulled back .. They were the only ones that had that high of a long term forcast....
JMHO
Skip