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Buzz on the Street: Twitter Leaves the Nest

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A look back at the happenings on Wall Street this week, as seen by Minyanville's Buzz & Banter.

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Friday, November 8, 2013

Quick Clarification on NFP Results
Michael Sedacca

I just received a few questions on NFP so I figured I'd help clarify with what I know about this payroll report.

The household survey, which reflected a decline of 735,000 jobs, is due to the government removing the furloughed federal workers from that survey (there was +/- 800K federal workers furloughed during the shutdown). My understanding heading into the report was that the government would not deduct the federal workers from the NFP report because they received back pay. However, given the 0.4% drop in the participation rate to 62.8% - which has to be the largest one month drop on record - it appears that the BLS just removed them from the workforce.

TNX Update
Marc Eckelberry

TNX (INDEXCBOE:TNX) is at a key retrace, 2.728%, which is 50% September/October. Note the steady climb since the FOMC day in October. Treasury bulls need to defend this area, or we could see some yield acceleration into year end.

http://image.minyanville.com/assets/buzzbanter/charts/original/110813/%5Etnx_(daily)__7_1383919822.jpg
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As for the futures, ZN makes an incredible swing from weekly R1 to weekly S1 in less than 1 minute. Resistance will be 126'130, the 11/5 VAL.

http://image.minyanville.com/assets/buzzbanter/charts/original/110813/zn_12-13_(60_mi_1383921336.jpg
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Range Expansion
Brandon Perry

We have tested every system under the sun and, amazingly, we have found one that actually works very well. It is a very good system… (under the realm of) trend following. The basic premise of the system is that the markets move sharply when they move. If there is a sudden range expansion in the market that has been trading narrowly, human nature is to try and fade that price move. When you get a range expansion, the market is sending you a very loud, clear signal that the market is getting ready to move in the direction of that expansion.
-Paul Tudor Jones

I don't normally put up 2-hour charts as it isn't my timeframe, but you can see this on the daily charts as well. Yesterday, we had a range expansion day that broke below the old breakout level. Now, we will see if we can consolidate under and fall, or regain and say "Just kidding!" Personally, I am concerned and have been highlighting my concerns for the last several weeks. The internals have been indecisive at best, but certainly giving warnings. The chart burned off all of the overbought on the NYMO, and then it didn't fire upward. We had a bit of a push through failure yesterday then we engulfed the whole last 2 weeks' range. This was a massive range expansion day. A day that should get your attention. From a trend following perspective, we just broke my close-below-the-prior-2-days rule. This is a rather ominous sign, and to me, it says that perhaps it is time to go hit the 50-day moving average below (about 1710ish). We still have not tested the 200-day moving average at all this year, so that is always a possibility, but it is too far out for me to gauge. Right now, NYMO closed at -43, so we really don't have much immediate downside potential; however, we could rest here and then fall quickly after a couple of days. Keep an open mind these days; yesterday was an important day.

http://image.minyanville.com/assets/buzzbanter/charts/original/110813/11082013_2_hour_1383923805.jpg
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http://image.minyanville.com/assets/buzzbanter/charts/original/110813/11082013_nymo_1383923807.jpg
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