A Week Too Long

BarroMetrics Views: A Week Too Long

It has only been a week, but seems much longer. To those who sent emails enquiring about my health, a big ‘Thank You’. I am well.

The blog went into hibernation for a week because I had flown to Singapore to give a series of presentations, and to attend a series of business meetings. I also wanted to catch up with my friends. In this regard I was not successful – meeting up with too few. Amazing how the older I get, the less time I seem to have to do all I want.

I had fully intended to continue the blog, if only with ‘skeleton’ posts. You’ll be amazed on how many readers can be lost by an unannounced ‘rest’. Unfortunately, with trading, presentations and meetings, the blog suffered.

So, the second order of business is to apologise for not letting you know what was happening with me. (The first order was the ‘thank you’ to those who enquired after me).

Turning to the market, they are certainly in an interesting state:

  • Will the S&P trigger an Upthrust Change in Trend?
  • Will the 30-Year Bonds trigger a Normal Change in Trend?
  • The rally in Crude, an opportunity to sell? Or have we seen the bottom?
  • Gold – signs of a new bull market?

I’ll look at all these next week.

In the meantime, we have Non-Farm. The consensus is 230K with the range 215k to 275K. This has been one of the narrowest ranges we have seen in a long time.

Given Obama’s problems, I expect to see a number that is at least at the upper end of the range – say 250K.  That said, it is worrying that the range is so narrow – contrarian theory says we are likely to see an extreme number – upside or downside. Anyway, we’ll see at 8:30 EST tonight. (For new readers, I hold a theory that ‘critical BLS’ numbers come out in favour of the administration; unfavourable ones tend to come out in non-critical periods. So far, this idea has worked for me).

If the upper end does come in, we should see a rise the USD, rise in Gold, interest rate yields up (prices down).

The S&P? Not sure. ‘Good numbers’ ought to produce a rally, but ‘good numbers’ also place the June interest hike back on the table. Technically, I  am looking for a rally to challenge the 2087 to 2094 zone, with a minimum target being 2075. The rally off Monday’s 1982 low has shown volume and range suggesting continuation (both exhibited volume and range within mean to mean +1 std).

The attached chart was last updated on Feb 3.  Updating the chart:

  • Feb 4 saw a small range down night;
  • Feb 5 saw a move to 2064 on reduced range and volume when compared to Feb 3 but still with ‘normal’ bounds.

Let’s see what tonight brings.

sp-5-d.png

S&P 5-day Swing