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MV Traffic Report: S&P Could Speed Still Lower


Rain or shine, we review the day's biggest stock stories.

Let's talk jobs: Today, the non-farm payroll data and the unemployment rate were released, and the results weren't great. For the month of June, non-farm payrolls were down 467,000 compared to estimates of -394k. The unemployment rate actually came in better than expected, at 9.5%; the estimates called for 9.6%.

Today on the Buzz and Banter, Minyanville Professor Tom Fant gave his thoughts on the numbers.

"The employment situation continues to deteriorate. I would point out a couple things inside the worse than expected headline number. Net revisions to prior months were essentially flat. Temporary help declined 38,000 which removes the hope we got from the flattish number last month that things might be looking up.

"The dreaded birth/death adjustment added 185,000 jobs(up 12.1% yoy) including 87,000 jobs in leisure/hospitality. I'll let you draw your own conclusions as to the feasibility of adding jobs in that industry right now. Also Initial Unemployment Claims topped 600,000 for the twenty-second consecutive week.

"On a brighter note, job losses in manufacturing were less than expected. Has anyone thought about a possible resurgence in American manufacturing as a possibility to lead us out of our modern depression? Sort of makes sense, if you think we're going to ultimately destroy the dollar."

The market didn't like this news, and today's slow holiday session was a trend day down. Doesn't the market normally rally into holiday weekend? The S&P 500 sold off by -2.82% to close at 897 right at the low for the day and near the low for the week.

The only sector to show strength was agriculture -- Potash (POT), Mosaic (MOS), Intrepid Potash (IPI) -- off news that Russia would be raising potash prices.

So how negative was today's action in the S&P 500? Professor Cooper sent out an alert to his subscribers giving them his thoughts:

"Today is the important weekly close. When is the last weekly close that saw the S&P close below its 50-day moving average since the March low? The answer is: It hasn't. Since the March low, there has been no weekly close below the 50-day moving average. It looks like we will see such a close today.

"Even if the S&P rallies back to give a marginal close at/near its 50-dma, I would expect, as you know, downside follow-through on Monday. Those are the odds. Conduct yourselves accordingly."

I would also note that we've had 3 straight down weeks in the S&P 500. For some reason, it doesn't really feel like it.

All right, Minyans: Next week will be pretty light, but earnings season will kick into high gear thereafter.

Enjoy the fireworks, and have a great 4th of July!

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