No Stopping Stocks Today

Stock futures have moved steadily higher throughout the entire trading session, virtually since the opening bell today.

Grains Stagnant Today

Soybean prices moved lower, but grains are largely stagnant today.

On days like this, I will immediately look for another trading vehicle that shows clean trading with sufficient volatility to trade well. Stock indexes and some of the currency majors fall into this category today. I use some software triggers to help me find these opportunities as they occur.

No News Is Good News for Stock Indexes

It is a good sign when a day without much news affects the stock index futures in a bullish way. Very stagnant overnight trading in the stock index futures and little news this morning would typically result in relatively benign trading. However, leading indicators that posted data as expected have helped the stock futures to move higher.

Selling Soybeans

Good news this morning for soybean consumers and makers of products that contain them! Soybeans have sold off at the open of the session, I suspect due to favorable and improving weather conditions in much of the growing region for the crop. Soybean prices over the past week have been trading within a relatively tight range of about $13.25 to $14.00 per bushel.

Non-Food Ethanol Coming?

A story I read earlier this morning. This sounds like good news not only for energy production, but for lower food prices as well:

The U.S. Department of Energy recently awarded SunEthanol a $100,000 research grant to help America develop clean transportation fuels from a variety of non-food feedstocks, including corn stover, bagasse, switchgrass, sorghum, softwood (pine), and high lignin poplar. This is the third DOE grant that SunEthanol has been awarded in the past year.

Here is the website of SunEthanol Inc:

Sunethanol

Corn, Soybeans Lower: Wheat Higher

Both corn and soybeans have moved modestly lower overnight, mostly due to favorable weather conditions this past weekend that have improved the outlook for good crop yields this fall.

Wheat is trading slightly higher, but on weak volume.

Crude Realities

Despite President Bush's visit to Saudi Arabia over the past few days attempt to persuade the Saudi's to increase the supply of crude oil to world markets, and despite the Saudi's decision to increase production by 300,000 barrels a day, crude oil prices have move still higher overnight. Crude oil is currently trading around $127.70 per barrel, barely off last Friday's fresh highs of $127.87. Since the front month contract expires tomorrow, we likely will see prices back off slightly for a day or two.

Congress Vs. Speculators

Executives of the Chicago Mercantile Exchange recently testified before Congress that there could be terrible consequences to trying to force speculators out of the futures markets. Here are a few facts that were pointed out:

• The Nymex increased margins 140% during 2007, and the price of oil doubled. Clearly, increasing margins won't bring down the price of oil
• Speculators are already required to put up 33% larger margins than exchange members who take delivery
• Restraining capital in this country will only cause capital flight to other places in the world where there is capital freedom. If this country doesn't accept or attempts to restrict capital, there are numerous other global futures exchanges where speculators can send their capital -- and they will.
  
• Research indicates that long traders tend to be much better capitalized than short traders. Therefore, increasing margins will only restrict those who short the markets, thus sending prices higher, not lower.
  
• Speculators only come into the market because the fundamentals are supportive of higher prices. Speculators don't drive prices higher; they follow the market.
  

Be careful what you wish for, because you may make matters worse!

Corn Collapse

Weather continues to favor more corn acreage and less soybean acreage. The charts of the two tell the story today.

Take Your Profits and Run!

Now, we are starting to see soybean traders take their profits and run for the hills today.

Wheat -- Buying on Daily Charts

This chart for wheat shows the daily on the left, and the intra-day market noise on the right. I am not trading wheat today for obvious reasons. The most significant aspect of this chart is the left one, bottom panel. It shows that heavy buying is stepping into the wheat market, following a drop of 40% over the past two months. I have mentioned this before over the past several days, but it appears obvious that there are some big players beginning to buy wheat. It looks like wheat is forming a bottom. At this point, wheat could simply trade sideways in a consolidation pattern for a time. (We often erroneously assume that prices trade only two directions -- up or down. Not so! Prices can trade sideways for very long periods of time.) Or wheat could begin a rebound. Much will depend upon fundamental factors like harvests in Australia and weather in the Northern Hemisphere. I will be watching wheat closely for signs that a new bull market may begin soon.

This Feels Like Something Significant Today

There is powerful movement in the financial markets today. Much appears to be related to a plunging US Dollar, as commodities are universally higher and the Dollar is taking a bath. Note here these charts this morning for three major currencies. Of course, when these move rapidly higher, the Dollar plunges. Many other currencies are also higher against the Dollar; these only only three examples.

Euro
Yen
British Pound

Stocks Retrace From a Bull Run

Stock indexes have been moving steadily higher in recent weeks on a bull run by climbing the proverbial "wall of worry". However, the daily chart on the left here shows that stock prices haven't risen that much over the past two weeks, and the Bollinger Bands are suggesting a trading range and resistance at the 200 day moving average. Today, shown by the intra-day chart on the right, stocks are showing some selling volume.

Soybeans - Temp Top, Anything Can Happen

Soybeans have now formed a top, at least temporarily. Anything can happen now. Prices could sell off through more profit-taking, or we could see still another round of buying. The daily chart at the far left shows that soybean prices started a bounce from their lows about a week ago off the Lower Bollinger Band, but prices are now at the Upper Bollinger Band resistance point at a price of about $14 per bushel.

"Anything can happen." -- Mark Douglas

Gold Back Over $900/Oz.

Commodities are broadly moving higher again, and the US Dollar is moving lower. The Dollar rally appears to have fizzled. Against all major currencies, the US Dollar is lower today. However, the US Dollar Index futures haven't shown much weakness. I have no explanation for that.

Is this the commodities bull round II?

And Crude Approaches $128/Barrel

Crude oil is on such a tear, that it appears it will never stop. Goldman Sachs issued a report this morning suggesting that crude oil will reach $141 per barrel for the second half of 2008 on strong demand from China. $5 gasoline isn't far away! That hurts!

Second Rise in Prices

Here comes the second wave of buyers. This is very typical behavior for the markets. The first wave occurs at the opening bell, and then some profit-takers will exit with quick profits. Then, after a few bars print across the screen, the second group of buyers will step in. This second group is typically much smaller than the first, and will result in a smaller rise in prices. Then, anything can happen, including a strong sell-off. However, I would be very surprised if the soybean market doesn't hold most of its gains from yesterday and today.

Meanwhile, corn and wheat are flat to modestly higher, but trading volume appears light.

Profit-Taking Requires a Fast Trigger Finger

I lost a little time on these two trades -- and a little of my profits -- due to an improper setting in my software that required a second confirmation.

Profit-Taking 1

Profit-Taking 2

It's a Bean Explosion

Soybeans have benefited from the rebound in crude oil prices after yesterday's brief sell-off due to options and contract expirations.

Wow! What a rebound!

Look at the spike in corn prices after being relatively subdued through most of the session.

Roller Coaster Day

Wheat has returned to the upside, and soybean prices have recovered half the losses for the day. When I mentioned in my last post that the selling was weak, this is what I was waiting for. Wow!

More Soybean Selling

The selling has resumed again, but there is no wind beneath the sails the second time. This suggests to me that volume is without conviction. I will wait now for greater strength in the next trend.

Wheat and Soy Rebound

This chart shows a stout rebound taking place now with wheat, but soybean prices also are now rebounding near the lock limit price. I have no idea if these rebounds occur due to profit-taking by traders who have shorted, or fresh buying at lower prices. I suppose that it really doesn't matter. After a rather stagnant week of trading, it is a welcome relief today to see some forceful volatility. I suspect that this sell-off is perhaps related to a similar rout in the price of crude oil today. The Dollar has remained relatively stable. Gold moved significantly higher for the day, but has since sold of somewhat, probably suffering somewhat in sympathy to other commodities.

Soybean Rout

The soybean sell-off has turned into an absolute rout. At this rate, we will likely lock limit down today, a 70 cent decline from yesterday's settlement price.

Prices Collapse

Corn and soybean prices have collapsed after sideways trading. On the daily chart (far left for soybeans), both corn and soybeans are in a consolidation pattern, and both have reversed in recent days at the Upper Bollinger Band. Corn penetrated the Upper Bollinger Band just a few days ago, and has been in a reversal pattern ever since.

Grains All Over the Map

Grains continue trading very erratically today, with corn and soybeans selling off modestly at the open and trading sideways ever since. Corn is down only a few cents this morning, and soybean prices are only down about 10 cents. Continued drier weather is providing hope that more corn will be planted, even though current crop plantings are only about 1/2 to 1/3 of normal at this date. Corn requires warm soil that is not too moist because it is highly vulnerable to cold and soggy soil conditions.

Wheat is modestly higher and holding its higher prices. I believe we are beginning to see early signs of a potential bottom in wheat on the daily chart (see chart at bottom of this post) despite the slight acceleration to the downside yesterday. The price of wheat has fallen 40% in the past two months, but that doesn't seem to draw much media attention. (If a trader had shorted wheat precisely at the top, that trader would be $25,000 per contract in the profit right now.) The downside acceleration yesterday was somewhat weak compared to the past, and may be suggestive of a consolidation (see the daily chart at the bottom of this post). Given that Australia is having a very good wheat growing season after two years of drought, it is hard to see a significant rise in wheat prices unless weather or yield prospects deteriorate significantly.

Of course weather can always change rapidly, and the situation can shift on a dime. I don't anticipate significant and lasting trend patterns until or unless the summer begins to show signs of either a bumper crop potential or degradation of yields (which can have innumerable causes). The bottom line is that it is just too early to see any long-term patterns developing. We are trading the weather and crop reports almost day by day.

Oftentimes, we will see sell-offs on Fridays as traders liquidate their positions before the weekend. We will then see traders place new trades following the Monday afternoon USDA crop reports, which give us clues to the progress (right now) of seed planting and the impact of weather for the previous week.

Corn -- Trading Sideways
Soybeans -- Early Selling, Sideways Trading
Wheat -- Modestly Higher Today
Wheat Daily -- Are We Forming a Bottom?
Note the heavy buying in the volume indicator.

Soybeans: Radio Static

Prices for soybeans today ended almost flat. The chart (above) looked like radio static, without any strong momentum either higher or lower. This is very poor follow-through on yesterday's strong soybean rally, and must certainly disappoint traders, farmers who would sell, and commercials alike.

Corn and wheat both sold off, with the long-term downtrend in wheat still intact, as mentioned on my previous post today. I barely eked out a profit in trading, and that was mostly from a small trade in 10-year treasuries and a better one selling corn. I should have sold wheat, but I let that one get away.

Wheat - Long-term Downtrend

Often, with all the talk of high commodity prices, the news media tends to ignore that many commodities prices are moving lower. Many of the soft commodities have been flat to lower over the past few months, including sugar, coffee, cocoa, and cotton. Both industrial and precious metals are also well off their highs from earlier this year. This chart for wheat is another example. The price of wheat has fallen 40% in the past two months -- more than $5.00 per bushel! The left chart is the daily chart, and the two in the middle and the right side show today's activity on intra-day charts. That daily chart for wheat has shown prices falling for more than two months!

Crop Plantings Fall Short of Normal

USDA reported yesterday afternoon that crop planting for corn and soybeans are only at about 1/3 to 1/2 of normal for this time of year. This falls terribly short of what we would normally expect for mid-May. It also begins to suggest that crop yields this year have the potential for also falling short of expectations. This is long-term bullish for prices.

CPI Data Flawed -- Again!

Last month, the US Government reported that gasoline prices at the pump fell 2%. Here is the daily chart for the price of gasoline future for April and early May. In fact, prices rose 13% -- in one month! You decide how accurate the government's reporting of the data was. Needless to say, the calculation and reporting mechanism for inflation by the U.S. government is fundamentally flawed. While all other developed -- and most developing -- nations' central banks are expressing strong concerns of future inflationary pressures, only the United States' central bank focuses only on "core" inflation and continually understates its impacts. The answer for "why" probably lies in the governments incentive to mislead so they can continue spending irresponsibly and suppress Social Security cost of living increases.

Food price inflation was reported at the highest in 18 years -- 8.4% annually!

Surging Soybeans

Better, drier weather across the Midwest has changed sentiment in the grains markets today. Corn prices have fallen with the greater prospects of more corn being planted, and soybean prices have exploded much higher with the greater likelihood that land will be planted in corn instead of soybeans. Prices have increased more than 40 cents from the bottom that printed at the open of the session.
While corn was down for the day, it also lead a late-session rally that erased most of its losses for the day.

Diversity of Futures Instruments

Lately, due to the growing number of voices trying to blame traders for higher commodities prices and seeking to ban our participation, I have been trading other futures instruments with greater frequency.

I have traded the 10-year treasuries and the S&P 500 futures with considerable success. They are both extremely liquid. However, I have a preference for trading treasuries. I have found that I can get better executions. I can also take larger positions, since the margin requirements are lower than for stocks. I have also found that they tend to move more smoothly and with less market noise than the S&P futures.

I have found that for evening trading, nothing can beat the S&P futures. They trade almost 24 hours a day except for 15 minutes in the afternoon (4:15-4:30 pm Eastern). However, I have found that during the off hours, executions are a little slower, even though spreads are still only 1 tick. I take larger positions and exit with only a few ticks of profit.

Oil Reaches $127

Crude oil prices have now reached nearly $127/barrel just minutes ago. The new record of $126.98 continues to push oil prices still higher.

More Costly Corn?

Exerpts from news stories yesterday regarding the USDA crop forecasts for 2008/9:

Associated Press writer Henry Jackson:
Corn production this year could be down as much as 7 percent from the record-breaking heights of 2007, according to a U.S. Department of Agriculture report released Friday.

Here's another one:

"Today's report is an indicator that we're going to be living with very high corn prices for a very long time, at least through the next crop year," said Mark McMinimy, an agribusiness and biofuels analyst with the Stanford Group in Washington.

Although the report could prompt high prices, Roose said the USDA was being optimistic in its projections. If nothing changes, there could be even bigger problems than the report suggests, he said.

"In some ways it's actually kind of a bullish report," he said. "The bottom line is it says we're off to a poor start. We needed things to go almost perfect this year to avoid a big problem and so far we're staring at that big problem."

Apparently, futures markets are pricing in almost perfect growing conditions for corn this year, which is appearing increasingly unlikely. My sources are suggesting that the USDA estimates are typically overly optimistic, and that this year they are unrealistically optimistic. The risk is to the upside for prices.

Only Soybeans Close Higher

Although corn reached new highs today, it closed down for the trading session. While somewhat bearish, I had anticipated the potential for a pull-back to the Exponential Moving Average on the daily chart. This usually would cause me to take a smaller initial position when trading on the longer-term charts.

Wheat sold off today, and despite a few rallies, prices never regained any footing. Liquidity for wheat was better than average today, so there must have been fairly strong interest in trading it today, following the USDA crop reports.

Soybeans closed about 48 cents higher for the day (see the chart). This was a typical trading day, with some difficult trading conditions at times, but also some good moves for nice profits.

Beans Blossom

Finally, after spending much of the trading session lower, the grains, and soybeans in particular, have rebounded and are headed higher. The fundamentals have won out!

Surprise! Prices Fall Instead!

Surprise shocks in the futures market can always catch traders by surprise. Today is an example. Corn has opened sharply lower with prices selling off instead. Wheat is off sharply as well, with soybeans opening sharply higher, but remaining relatively flat from that opening price. Could demand decay be occurring? Wow!

This is one reason why one of my past mentors told me to ignore fundamentals-related news. If I am expecting the market to move higher based upon a news event that creates this predisposition in my mind, it's difficult for me to sell when the market moves in the other direction. There is always more news that I don't have, and in cases like today, that other news may move the markets in a direction that I didn't expect. Thus, it is best for me to react to the charts, and if I maintain an open mind to either direction, I can trade without the biases that lead me to make errors in judgment.

Grains Broadly Higher

It appears that commodity prices are now rapidly escalating toward round two of inflation. Recent Dollar gains have stymied, and commodity prices, lead by oil, are moving rapidly higher. Grains have been among the most subdued in recent weeks, but with soybeans, corn, and wheat all forcefully higher in overnight trading on good volume, they appear to be poised to move to even higher highs down the road. Soybeans and wheat have moved only modestly, but corn is up more sharply.

Corn (see the chart) has reached fresh all-time highs overnight. Furthermore, the USDA crop reports that were released this morning are also quite bullish for prices. Corn production would have to increase 33% next year just to meet U.S. government expectation. 60% of the U.S. corn crop would have to be planted in the next 3 days in order to meet demand expectations for this year. That's not going to happen, so the corn crop this year is likely to disappoint. Elevated prices, however, are also starting to rein in demand.

The USDA report is also bullish, with the protests in Argentina resuming upon the complete breakdown of talks between farmers and the socialist government. Weather, however, is contributing to good harvests across South America.

Crude At $126.20 -- Painful At the Gas Pump

As crude oil continues its march to higher and higher prices, it is more and more clear that it is going to create more and more pain for drivers as they see the escalating price at the gasoline pump.

OIL Above $124.50

Traders Not Causing Higher Food Prices

From a story on Marketwatch.com today:

The latest report from the Commodity Futures Traders Commission about outstanding rice contracts shows that only about 19% of them are held by non-commercial investors, or companies that might be speculating as opposed to actually hedging against price moves.

He said effects such as production problems, demand increases, the increase in energy costs for producers, and even the decline in the value of the U.S. dollar have all played even bigger roles in contributing to the surge in prices. The dollar itself has contributed to about 25% of the price increases in agricultural commodities, especially in corn and wheat, he said.

"We had a bit of a perfect storm in a lot of these markets," over the past year, he said. "Commodities are very energy intensive to produce and transport."

Corn Break-Out

Corn has not only achieved a new all-time closing high, but has also closed outside of the Bollinger Bands, and it represents a perfect Cahen T1 (see his book in my list at the right side of this blog). This daily chart shows the emergence of what may be a new trend for corn. This is a strongly bullish signal, and when combined with strong volume, as this shows on the Klinger Volume indicator, it has a very high probability of success. If prices continue higher than the new high reached today, this new bullish trend would be confirmed. I am also looking for a possible pull-back to the Exponential Moving Average before the new bull trend resumes. Wheat was also stronger, and even soybeans rebounded somewhat just in the closing moments of the trading session.

Sell Grains!

All of the grains have sold off in the closing minutes of trading. Soybeans has sold off the most, but wheat selling has also been brisk. Corn has largely held onto its gains for fundamental reasons. Wheat is also solidly higher today. Soybeans will benefit from the corn planting delays, which is bearish for prices.

Grain Commodities Put in Floor?

I have written more about this on my ETF blog today, but from this chart of the grains-only ETF of iPath, it appears that grain prices have bottomed and are poised to either begin moving higher or perhaps consolidate for a time.

Wheat Parabolic on Intra-Day

Lest my last post appear somewhat inconsequential, look at these intra-day charts for today. Wheat is moving powerfully higher today!

Wheat Appears to Bottom

Wheat has plunged in price over the past few months from a price of over $12.72 per bushel to a recent bottom of around $7.76 per bushel, a 39% drop in price. Now, it appears from this daily chart that wheat has bottomed and is beginning to move higher again. It seems odd that although wheat, livestock, and other commodity prices have fallen in recent months, the pundits don't mention this.

New Record for Corn on Oil Strength

Corn and soybean prices are higher today also, largely as a function of both continued planting delays due to wet weather and yet higher crude oil prices and their impact on the price of ethanol.

Gold and Oil Higher

Gold has moved significantly higher today, and crude oil has reached another new all-time record of $123.90/barrel. The Dollar has softened somewhat today, perhaps a contributing factor to the gold and oil event.

Crude Oil at $123

Crude Oil - Record After Record

Crude oil prices are now just shy of $121/barrel. Don't stand in the way of this freight train! And just look at the price of natural gas and gasoline, too!

Until America wakes up and gets serious about becoming energy independent, this will continue, and will eventually result in economic catastrophe -- and possibly even worse. I am completely in favor of developing green energy. I think every building in America, including every home, should have solar cells on its roof and a wind turbine somewhere on the property. I think every power pole in the country should have small solar cells and turbines on them also. Green is good. Very good!

However, this is only a partial solution. We must also produce more oil at home, combined with clean coal and possibly nuclear power also. The United States has more crude oil sitting off its coasts than all of Saudi Arabia, but doesn't permit its production largely due to overly-zealous environmentalists and politicians from the states so affected by them. They are determined to reduce use of energy in the United States even if it leads to a depression. They are convinced that's what is necessary to compel everyone to adopt their misguided vision of energy utopia. It is leading America instead toward an energy and economic collapse of cataclysmic proportions -- at the point of an economic government gun!

America's energy solution must be a broad-spectrum solution. The green energy fanatics and global warming lunatics are going to drive the United States into a depression and back to the dark ages because they are determined to limit the solution to just a few forms that simply can't meet the demand nor fill all the needs. Thus far, there simply isn't a replacement for all the utility of crude oil. That's the reality. Until we accept it and develop our domestic oil resources, we will continue toward the edge of the cliff. If you think its bad now, America, just wait until we reach the cliff!

Last week, the President of OPEC predicted $200 oil. And that's not even the edge of the cliff either. The cliff will abruptly arrive when, for some reason, whether an oil embargo, a war, or the complete collapse of the Dollar, the oil supply is completely disrupted. Even the Petroleum Reserves won't be sufficient to fill the gap -- it is only about a 3 week supply for the United States. Just 3 weeks!

None of the 3 major political candidates for President is committed to developing domestic energy independence in a manner that will work. All three are more committed to the global warming sham than to energy independence. All three are ideologues, not solution-finders. Whichever one is elected, I predict will eventually go down in infamy when history gives them their due.

Contrary to what populist/socialist politicians would have you think just to get elected, the oil companies are not the villains. They must acquire oil from the same tyrannical dictators as everyone else. They are literally competing every day with Communist China and other governments around the world that also have a thirst for oil. The risks involved in the troubled sore spots in the world are growing with each passing hour. We ignore those risks and villainize the oil companies at our own peril. By increasing taxes on them, we'll simply end up with less oil and higher prices? Don't believe me? We tried windfall profits taxes before, and what did we get? Higher prices and less oil! Just do your research, study your history, and then wake up!

Heaven help us!

Bottom Drops Out of Corn

In the closing minutes of trading today, the bottom has dropped out of corn prices. Just 15 minutes before the close, prices plunged and nearly reached lock limit, but have now rebounded more than 10 cents, which is 1/3 of the limit amount.

Making Money in Slow Markets

On days like today, I will trade much like I do in the evening. Corn is less than 4 cents from Friday's settlement price, and has barely moved in the past two hours. Stocks and treasuries are relatively slow also. Stocks are lower for the day, but haven't moved too much from their opening prices. I will only trade instruments with no more than 1 tick spread, which limits my trading to a few currencies, treasuries, the S&P 500, and corn. I will take a position fading the market when they reach their most recent extremes, taking profits of only 2-3 ticks. This is extremely risky, but allows me to put a few dollars in the till. I keep even tighter stops than usual. As soon as prices move just 1-2 ticks in the wrong direction, I get out. I do not recommend this form of trading.

Painful At the Pump: Crude Oil Above $120!

Crude oil has passed above the $120 mark once again. I don't recall the old record, but it was approximately at the levels we find ourselves at once again. Shucks! That's just plain painful at the pump!

Grains Trading is Ugly Today

I have been trading primarily soybeans today, but have barely eked out a profit for the day. Corn isn't any better -- dead flat, and having barely moved from where the session started right around the $6.10/bushel line. Volatility is low, spreads are too wide, and slippage is greater than what is typical. I suppose that after an average to good week last week in which we had more than the average number of good trading days, we must endure a few days like this one. It keeps us humble and hungry. The crop report this afternoon may give great direction to the market, but for now, not much is happening.

Crude Back to $119

The price of crude oil has once again reached near record levels around $119/barrel (above chart). The Commodities Index futures have also reached their previous record levels once again (below chart).

Crude Oil Back Above $117

That sell-off of petroleum didn't last long, did it?

Misleading Employment Statistics

Here are some excerpts from John Mauldin's newsletter dated 5/2/08. In essence, his newsletter explains in detail why the employment report last Friday was much more disastrous than the headline suggested, once one digs into the numbers. For example, he explains why the unemployment rate fell even thought population increased and jobs were lost:

April, for whatever statistical reason, has shown the highest number of birth/death jobs for any month. In 2007, the BLS estimated that 262,000 were created in April that they could not account for in the survey of businesses. Somehow, the spreadsheets at BLS had them add 267,000 jobs in April of 2008. That number includes an estimated 45,000 new jobs in construction! And this in a time when both residential and commercial construction are contracting. The actual survey results showed that construction jobs fell by 61,000.
And somewhere, they estimate that 8,000 new jobs in finance were created. As Philippa Dunne notes: “It may be that the gains in our old friend, bars and restaurants, are the [birth/death] model's creation; it added 83,000 to the leisure and hospitality sector. With vacation plans at near-record lows, and restaurants reporting reduced traffic, many of these job gains could disappear in the next benchmark revision.”
Without that addition from the birth/death number, total private employment would have dropped by 296,000. Now, if that had been the headline number, the market would have tanked. Now, I have no doubt that the economy did create a lot of new jobs last month. But when the final revisions are in, we will see that job losses were well south of 100,000.

Unemployment supposedly dropped last month by 0.1%, to 5%. How could a loss of jobs mean a rise in employment? Because the statistics mask a rather disturbing trend. The number of people working part-time is rising rapidly, and they are counted as employed. Again, From Philippa Dunne of The Liscio Report:
“Almost 3/4 of the gain in non-agricultural household employment [from the household survey] came from those working part-time for economic reasons, and another 83% came from what used to be called ‘willing' part-timers. Yes, that adds to more than 100% – 154% to be precise – because fulltime employment declined by 375,000. The increase in those working part-time for economic reasons was at the 93rd percentile of all months since the series began in 1955; the decline in fulltime employment was at the 90th percentile.”
This employment report was ugly, when you look at the numbers under the headline statistics. It is no wonder consumer sentiment is down.

There is other frightening stuff in it. Read it in its entirety here:
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