Yesterday we saw the reported initial jobless claims remain unchanged at 505k and most saw this as a good sign. I’m not so sure. From my understanding if you continue to apply for benefits due to the recent extension you are Not being counted in the reported Claims figures. Why, we placed a few calls into the Dept of Labor and have not received an answer yet, but I’m guessing that it is a timing issue. The “extended claims” are only reported through the end of Oct, not up to last Thursday. If the “extended claims” are the number we should be using for forecasting NFP then we are about to be disappointed again. The difference between 505k and 540k is either a -75k NFP or -250k NFP. A big difference! If the DOL tells us that we’re wrong we’ll let you know, but for now it looks as NFP will disappoint those economic bulls out there.
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Jobless Claims
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Extended Claims
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10/16/2009
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531
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531
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10/23/2009
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532
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532
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10/30/2009
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514
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541
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11/6/2009
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505
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523
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11/13/2009
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505
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Projected:
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11/20/2009
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514
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532
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11/27/2009
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510
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532
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12/4/2009
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508
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530
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12/11/2009
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509
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531
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12/18/2009
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510
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531
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12/25/2009
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509
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531
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The chart below is the 4 hourly chart of EURUSD. You can plainly see the lower-high that developed this week and now it looks to retest the longer-term moving average (in aqua). Per my model if we break we'll move from Long to Neutral (has been Long since mid-May). It'll be a while before the model turns from Neutral to Short but remember last December when those calling for Parity were met with a reality check and we went from 1.25 to 1.40. Merry Christmas type of trade for those paying attention. Will it happen again? We'll be here if it does.
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The chart below is courtesy of FXCM.
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Of course a weaker Euro and a stronger Dollar are bad for stocks. Before Friday's close we've created a doji candle on the S&P Daily which is a reversal signal. We'll need a contrarian day in stocks to keep up the Great rally of 2009.
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