Just a couple quick thoughts before we head into the holiday weekend.
Let's take a look at TNX today:
Now let's take a look at the dollar:
All right now let me get this straight: We have gold holding its highs, treasuries majorly selling off, and the dollar collapsing after rising sharply earlier in the day.
Oh and of course stocks are also up! What a shocker!(sarcasm off).
Folks, the disconnect between whats going on in the economy and the stock market is at an all time high IMO. Unemployment rose to 9.7% today and the economy lost another 200,000+ jobs. How is this bullish?
The bulls say "things are improving". I say where? The greatest analogy I read today around this line of thinking is "after you slice the throat of a pig, the bleeding slows down after awhile".
The charts above tell me that we could be seeing a major flight out of the us dollar. In fact, we could be seeing a flight out of US assets all together based on the price action in bonds today. I was very curious to see if gold would hold its highs today and it has.
The Bottom Line
When the cats away the mice will play. I think the HFT's were able to take this casino higher today because everyone is in the process of heading to their favorite Labor Day spots.
My view has not changed. The fundamentals of this market are stunningly bad and worsening in my view. We should hit 10% unemployment by the end of the year. U-6 unemployment now sits at a stunning 16.8%. That's right folks, almost 1 out of 5 people are now out of work.
How is the economy going to grow when almost one fifth of the nation is not working?
The big boys are back from the beach next week. It will be interesting to see how they react to today's unemployment numbers and the big move in metals this week.
Keep an eye on gold, the US dollar, and bonds moving forward. If they keep acting like they did today, we could see a 5 alarm fire in no time in the stock market.
Well I am off for some R&R. Enjoy your Labor Day!