Fantasy Markets is The Game
The SPX was +2.0% last week closing at a new cycle high of 1614.12 on Friday. This was accelerated by the NFP “fantasy report” from the Bureau of Labor Statistics (BLS), which you can never distinguish whether it is reality or fiction.
Regardless of the report’s credibility the market reaction was +1.0% for the SPX. The number was +165,000 with the UE rate at 7.5%. However, the labor participation rate was 63.3%, which is a 34-year low or the lowest since 1979. Also, the percentage of Americans that are self-employed is now the worst since 1982.
The BLS also revised the February and March job numbers up significantly and that enabled them to keep the overall average up. Also, the Birth/Death adjustment (which is just a “convenient” no fact estimate by the Gov’t) was +193,000 and is the largest “pie in the sky” B/D estimate this year.
The SPX futures hit 1611.75 following the NFP hype and before the NYSE opened, then made a 1614.25 high on the 10:30AM bar [15 min chart] and that was it for the day. The cash index made a 1618.40 high on the 10:30AM bar versus the +2.0 VB at 1618.81, and that was the intraday high for the day. The index flat lined for the remainder of the session and then faded to close at 1614.42 after making a 1612.92 low.
It is redundant in this Fed manipulated market, but the SPX is extremely extended as the monthly 5 RSI at 90.39. There is some minor fib time ratio symmetry this week in that 5/5/13 is the 1.414 extension using the 4/2/12 1422.38 and 9/14/12 1474.51 highs, measured from the 1474.51 high.
There is also geometric date symmetry on 5/7/13 measured from the 1474.51 9/14/12 high, with the 1343.35 11/16/12 low as the other leg of the triangle. Also, 5/7 is a fib count in trading days [13] from the previous 1536.03 low at the 50DEMA on 4/18. I have also included charts of my Fib Time Ratio Calculator and Geometric Date Calculator which highlight the time symmetry. The next major time symmetry is in June and August 2013.
The “Panic of 2008” has been followed by the “Greatest Manipulation of All Time”, and so the Fed remains the driver of the markets. However, Bill Gross of Pimco is right on when he says “Sell Risk Assets-Don`t Buy Risk Assets”.
