BarroMetrics Views: FOCM Jan 9 2015
I am looking for a below consensus headline number. Shadowstats has been warning of a possible downside surprise. If it is likely to come, it will come tomorrow – some market participants have yet to return and sentiment is high. In addition, a low number may prove to be the S&P’s cause celebration – in the hope that the FED won’t raise rates till June 2015 or later.
Figure shows the expectations numbers for December 2014 and January 2015. You’ll see that the bottom end of the range has risen from 140K to 202K (as rise of 62K) and the upper end from 275K to 305K (a rise of 30K). I believe comparing the expectation numbers this way provides a better guide to the market sentiment than by just comparing the consensus numbers.
What effect will a figure of, say 210K, have on the stock market and US$?
Not sure about the stock market. There will be an immediate downward blimp; but we may see the market close up for the day. Certainly the price action will provide clues about the current market structure and sentiment.
The US$ will probably head south and close down. As a trader who is long the USD (last thirds), I am concerned about the universal bullishness in the USD market. A short squeeze environment is there for the taking – only needs a stimulus.
FIGURE 1 Consensus Non-Farm