Jobs Report: Heads I Win, Tails You Lose!
By Todd Harrison Sep 07, 2012 9:55 am
QE3 embers are stoked; the labor force is not.
In terms of forward catalysts, above and beyond the next FOMC (Goldman pegs QE3 at 50-50), please circle September 12 on your calendar. As per this excellent Bloomberg article:
In the morning, the German supreme court will rule on the constitutionality of the planned permanent rescue fund, potentially upsetting Germany's more than half-century pursuit of European unity; at lunchtime, the EU commission will lay out its proposals to put the ECB at the heart of continent-wide banking supervision, already questioned in Germany; and at sundown, polls close in an election in the Netherlands after a campaign marked by calls for more spending at home and less on fiscally irresponsible neighbors.
Minyanville Professor and T3 Maven Scott Redler, whose trading vibe I respect tremendously, recently called the upside trend our friend and the short side "cute." That has proved prescient as fund managers returned from the beach to find themselves fending for a job and chasing performance (with a perceived Bernanke backstop).
I will only add that the only thing more dangerous than "cute" is being "comfortable" - and when a direction appears obvious, the path of maximum frustration typically isn't far behind.
I enter today with a right-sized put position in the QQQ (I raised my stop from NDX 2800 to NDX 2850 to allow for a pop-and-drop). Whether I'm early or wrong will depend entirely on where the averages are when I close out the position. I'm underwater and truth be told, I feel pretty silly to be on this side of the market. While the best trades are usually the hardest fades, this jury remains out on this particular try.
Separately, and at the risk of blurring the lines between church and state, some of you might have seen the eSignal media campaign that (officially) launched yesterday. (This is one of the spots; filmed in 105 degree heat no less!) Those who know me understand that I wouldn't put my name to something that I didn't believe in. We're stoked by this alliance. And while we don't "do" advice in the 'Ville, I would suggest taking advantage of the free 30-day trial.
Chart of the Day
Please keep this chart in front of you. If history rhymes, commodities must rally, the S&P must fall, or there will be a combination thereof as we regress to the historical meaning of the modern-day coupling.
Click to enlarge
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Position in QQQ.
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