In this week’s Joy of the Trade Weekly Review, we’ll talk about Friday’s jobs number and what it means for the market and much more.
Last month was the strongest July we’ve had in years, so naturally I came into the week a little bearish. As you know, I have a bit of a contrarian streak in me. I tend to bet against exaggerated moves to the upside and vice versa.
Part of the reason July was such a bullish month was because rates came down. The market got ahead of itself when it looked like the economy was slowing down and that the Fed wouldn’t be able to raise rates as aggressively. Things got a little out of whack…
But then the jobs number dropped.
There were a few different scenarios I outlined depending on where the number came in, with two out of the three situations leading to bearishness and selling. And any time there’s a clear bias in one direction, that’s where my trading will lean. I play the odds.
And sure enough, that’s what we’re seeing play out Friday morning following a massive beat on those nonfarm payrolls. And yes, it might sound counterintuitive for markets to fall when unemployment fell more than expected, but I’ll explain why in today’s video.
So let’s take a look at how, and especially why, this news is sending the markets lower and what I expect next…
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