The BLS used seasonal adjustments and fake B/D jobs to substantially reduce February jobs losses.
John Williams notes: February Payroll Loss Was 899,000 Net of Concurrent Seasonal Factor Bias Concurrent Seasonal Factors Go Awry. This mornings (March 6th) reported February jobs loss of 651,000 was suspiciously close to revamped consensus expectations of a 650,000 loss, yet the loss would have been 812,000 without revisions to Januarys level, and would have been 899,000 net of the Concurrent Seasonal Factor Bias (CSFB), as also discussed in a separate section below.
http://www.shadowstats.com
The BLSs hokey Birth/Death Model added 134k jobs in February. One year ago 135k jobs were created. ADP reported that small and medium-sized businesses lost more jobs that large business. Yet the BLS continues to perpetrate its B/D job growth fraud even though the BLS again had to revise previous job growth lower. January and December NFP have been revised 161k lower. http://www.bls.gov/web/cesbd.htm
U6 Unemployment hit 16% NSA [not seasonally adjusted] in February! SA it jumped to 14.8%! Both are records for the data series. If you add in people that have not sought work over the last 12 months, an estimated 3% to 4%, you have Depression-level unemployment.
http://www.bls.gov/news.release/empsit.t12.htm
U6 Unemployment NSA (not seasonally adjusted) http://data.bls.gov/PDQ/servlet/SurveyOutputServlet
Stocks surged on Fridays open on relief that the NFP was in line. But once people could delve into the February Employment Report, saner angels discovered the BLS chicanery and stocks reversed.
Rumors that GM would declare bankruptcy over the weekend felled JPM and Goldman on perceptions that the two banks have significant GM exposure. Good thing JPM has a fortress-like balance sheet!
The DJIA tested the 6350-6500 support that we mentioned over the past few weeks. The next significant support is 6000 and then 5730 to 5800 (1996 breakout level).
The late rally on Friday as well as the knee-jerk rally on in-line NFP suggests that there are too many shorts in the market now. Thursdays market carnage appears to be the product of short selling ahead of an expected ugly employment report.
Also, bonds rescinded their Friday rally and finished down on the day, a reversal of about 2 points.
Stocks are now more oversold, as reflected by their distance from their 200-day moving average, than during the 1987 Crash. At Fridays trough, the DJIA was 34.6% below its 200-day moving average. In the 1987 Crash, the DJIA was 31.8% below its 200-day moving average at the trough on 10/20/87. On November 13, 2929, the DJIA fell 40% below its 200-day moving average.
As we noted last week, stocks should make a tradable bottom on Monday or Tuesday. The rally might last into the first few days of April. But then the market could swoon ahead of what should be very ugly Q1 earnings reports.
Essentially were looking for a replay of the moderate rally after the November 20 low into the first two days of January. Anticipation of and the eventuality of an ugly earnings reporting season felled stocks.
This time the rally duration should be shorter because end of year performance gaming and the usual jigginess to start a new year will be absent.
The venerable Alan Abelson: The president last week took a break from the arduous task of carrying the world on his slender shoulders to offer a prophecy that could only warm the cockles of Wall Street's heart (and we're taking it strictly on faith that it has one). He ventured that this was a good time to buy stocks.
While, at least publicly, the president's remarks last week represented his initial fling as a stock-market prognosticator, he's now automatically eligible for the coveted Jesse Livermore Award, created by Bill King, who puts out the sharp-toned King Report. It's to be conferred, Bill explains, on the soothsayer who calls the greatest number of bottoms before this poor market actually hits bottom, if it ever does.
AS A POSTSCRIPT TO THE ABOVE, IT'S WORTH noting that Bill King takes strenuous issue with the notion, which is virtually epidemic among bottom fishers, that stocks are begging to be bought because they've come down so far. "Buying all the way down in a secular bear market," he acerbically observes, is the surest way to lose money, and lots of it.
And forget at your peril, he warns, that we're up against not just any old secular bear market, bad as that might be, but a much more pernicious "super-bear market."
We hear you, Bill, loud and clear. http://online.barrons.com/article/SB123638350020358065.html
Long-time readers might recall that we have noted that Alan Abelson and Richard Russell are the two biggest influences on our writing. As a trader turned strategist/writer we were fortunate to have been weaned on their style, wit, directness and critical reasoning.
