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OI Technical Staff : 9/1/2006 9:59:59 PM

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Marc Eckelberry : 9/1/2006 4:24:45 PM

Bonds sure fooled me earlier, even though that short pre-open was a good trade if you got out at gap close. With the VIX at Sept 2005 levels, you have to wonder who is chasing this. I was bullish all the way into labor day, and I stuck with the plan and exited all longs yesterday and today. Maybe I'm too early, but better safe than sorry.

Marc Eckelberry : 9/1/2006 4:08:24 PM

With the VIX at 11.95, VXN at 16.78, this could be the short set up of the month. They might give something better Tuesday, but that is a maybe. The gap close at 1601.75 would be targeted, but I start nibbling now.

Marc Eckelberry : 9/1/2006 4:01:26 PM

I re-entered short at 1595.25, what the heck. I can always cover on the limited session on Monday. Well worth the gamble.

Marc Eckelberry : 9/1/2006 3:59:56 PM

This is low volume tricks at this point. They know many traders are thinking short ahead of the weekend and they are just having fun nailing the stops. But I don;t think anyone will be holding an equity future long over the holiday.

Marc Eckelberry : 9/1/2006 3:56:51 PM

Bears could not bring the market down, but quite a few big techs took a hit, especially the ones that run up like NVDA, ALTR. TXN and AMD. Just not a pretty picture under the surface.

Marc Eckelberry : 9/1/2006 3:55:27 PM

SMH and SOX closing in the red, once again.

Keene Little : 9/1/2006 3:54:38 PM

Couldn't help taking another peak at the market before it closes. Looks like I didn't get my ES 1316 short. The pullback from the high looks corrective still which suggests another push higher on Tuesday. Think I'll wait to see if we get that new high and then try the short side. Flat is a good position as it allows us to relax over the weekend. Have a good one.

Keene Little : 9/1/2006 1:51:52 PM

A little sideways move here is perfect. Looking at just today's price action we got the gap up (wave-1), sharp pullback (typical for a wave-2), rally up from there (wave-3) and now a sideways correction for wave-4 which is typically opposite to what wave-2 does. So a sharp pullback for wave-2 is now being followed by a sideways wave-4. This should be followed by another push higher in wave-5 at which time you'll want to short it. ES 1316 looks like a good target.

My sell order and stop order are both in and I'm ready to walk away and start my weekend. I hope everyone has a great holiday weekend. Be safe, enjoy your friends and family and I'll see you on Tuesday.

Keene Little : 9/1/2006 1:37:24 PM

If this tags 1316 I'm going to be real tempted to hit it with a small short position and then place my stop wider than normal such as 1320. A smaller position with a wider stop would give me a same-risk play as a larger position with a 2-point stop.

Keene Little : 9/1/2006 1:15:29 PM

Price is slowly marching higher which shows the underlying bid and lack of sellers. At this point the first lower low should be an indication that high is in for the day. Until then be aware you're trying to pick a top if you want to get short before the weekend.

Keene Little : 9/1/2006 1:00:08 PM

If ES 1313 doesn't cap this rally then the next upside target is 1316 which is where we'd have two equal legs up from Tuesday. The type of pattern for the move up from Tuesday says there's a good possibility we'll see that hit today and should be an excellent place to try a short play (and carry over the weekend so understand the risks and margin requirements).

Keene Little : 9/1/2006 12:38:02 PM

I'd watch the ES 1312-1313 area for a potential high. There's an ascending wedge for the move up from the Aug 23rd low and the internal wave count looks near complete here. Negative divergences (if they mean anything today) support the bearish interpretation of this pattern. It's not a bad spot to start legging into a few bearish plays.

As I mentioned in the Wrap, the summer rally in 2000 found its high on Sept 1st which was also a Friday before the holiday weekend. It was a long drop from there. The summer rally of 2002 looked just like this year's from the June low (3-wave bounce with an ascending wedge for the 2nd leg up) and it was followed by a strong sell off into October.

I have a strong impression that we're going to see a nasty Sept/Oct this year. The selling should start very soon but if it doesn't and instead SPX climbs above 1320 then I'll stop out and watch 1330 for the next opportunity.

Jane Fox : 9/1/2006 12:35:10 PM

I will be gone for the rest of the day to attend a funeral in Vancouver, however, I plan to be back Tuesday. Everyone have a safe Labor Day weekend.

Marc Eckelberry : 9/1/2006 12:15:21 PM

Corrected on both posts. In any case, bears could regain control near the close.

Marc Eckelberry : 9/1/2006 12:14:11 PM

Sorry, wrong chart. Here it is: Link

Marc Eckelberry : 9/1/2006 12:14:47 PM

The triangle breakout occurred but we stalled at 1593 previous high. We are now forming a bearish ascending wedge, 5 mn chart. Welcome to the chop zone. Nevertheless, the short side odds could be improving once again. Link

Marc Eckelberry : 9/1/2006 12:05:42 PM

SMH still has R at 34. But today is not a normal day. In any case, unless you are a good scalper, stay flat. Better trades next week.

Jane Fox : 9/1/2006 12:35:46 PM

Yes indeed Marc the internals are improving. I never short an AD volume making new daily highs. Link

Jane Fox : 9/1/2006 11:47:10 AM

Here is the daily QN chart. Link

Marc Eckelberry : 9/1/2006 11:47:01 AM

Internals improving, I might have to change my tune, at least for today. Triangle is holding, bullish above 1591.

Marc Eckelberry : 9/1/2006 11:45:26 AM

Noticing the 10 dma starting to curve down. It has too much space between the 20 dma. Needs to come together. All in all, I think we are due for a stronger pullback any day. I'm not bearish long term, but right now it seems we are ripe for a move down.

Jane Fox : 9/1/2006 11:42:40 AM

This is me going out on a limb and going on record as to what I think Natural Gas will do. As if I know what I am talking about. Link

Marc Eckelberry : 9/1/2006 11:41:44 AM

But maybe that's all that's around now anyway.

Marc Eckelberry : 9/1/2006 11:40:54 AM

You don't build new highs on that kind of sector weakness (SOX). It just smells like small time traders chasing the calendar.

Jane Fox : 9/1/2006 11:39:25 AM

As I have said ad nausuem keep your eye on the MACD (RSI), it needs to confirm price to keep the rally alive.

Marc Eckelberry : 9/1/2006 11:38:15 AM

If it wasn't for INTC, SOX would be down much further. TXN, AMD, NVDA, XLNX all down.

Jane Fox : 9/1/2006 11:38:10 AM

ER... Link

Jane Fox : 9/1/2006 11:37:29 AM

NQ... Link

Jane Fox : 9/1/2006 11:36:37 AM

YM ... Link

Jane Fox : 9/1/2006 11:35:46 AM

The markets have broken daily resistance now the bulls are looking for a close ABOVE that resistance. Here is ES on the 240 minute chart. Looking good so far. Link

Marc Eckelberry : 9/1/2006 11:29:08 AM

They are trying to go for that gap close above at 1601.75. If 1589 holds no, it's possible. But the SOX is still red and AD lines pretty weak. Nevertheless, there is a triangle breakout possibility. I just don't trust the internals. If they drive it up, it will be with more bearish diverences.

Marc Eckelberry : 9/1/2006 11:23:10 AM

Well now we have a triangle on the 5 mn. Flat it is, I'll take it up on Monday night.

Keene Little : 9/1/2006 11:22:01 AM

I'm back. We're getting a rally but as has been so typical it's a choppy one. I expect that will continue into this afternoon when we could then see some profit taking. We've seen an effort to hold the market up this week but there will probably be some fear about what September will bring and many may decide to reduce their risk from here.

On a day like today it's difficult to tell if the negative divergences on the charts are a result of actual weakness setting in or just low volume. I would not want to chase this market higher and would start looking at selling some bear call spreads today. See if you can get a good price in case we get a minor push higher from here.

Marc Eckelberry : 9/1/2006 11:20:04 AM

1590.50 is resistance again. Don't you love these games. My bias remains bearish today.

Marc Eckelberry : 9/1/2006 11:16:36 AM

I would just stay flat now. Booked some profits, time to go home.

Marc Eckelberry : 9/1/2006 11:16:06 AM

Bonds have bid and oil dropped. Some confusion here, but the SOX is still red and we have building bearish divergences. One can re-enter short on a failed rally.

Marc Eckelberry : 9/1/2006 10:49:34 AM

Close the trade for +7 now.

Marc Eckelberry : 9/1/2006 10:48:24 AM

Big drop in oil. I don;t trust the downside as much now.

Marc Eckelberry : 9/1/2006 10:47:05 AM

A note on that, Jane. If Otellini does not cut at least 10K in jobs, the street will be very unhappy. He needs to cut 20K in jobs to get the stock really going now.

Marc Eckelberry : 9/1/2006 10:45:04 AM

As long as the SOX is red, the play is to stay short. If bulls manage to get SMH back above 34, it could spell trouble for shorts. But so far, that is not the case.

Jane Fox : 9/1/2006 10:44:36 AM

Sept. 1 (Bloomberg) -- Intel Corp. Chief Executive Officer Paul Otellini may cut at least 10,000 jobs next week, or about 10 percent of the chipmaker's workforce, in his efforts to slash $1 billion in costs this year.

Otellini will discuss the results of a 90-day internal review with employees on Sept. 5, said Patrick Ward, a spokesman for Intel. In an interview today he called reports on job cuts "speculation." Mark Edelstone at Morgan Stanley is among analysts who predict at least 10,000 reductions.

Intel, the world's biggest semiconductor maker, is wrapping up its most sweeping overhaul since the 1980s as Otellini battles market share losses and falling sales. He decided to fire 1,000 managers in July to restore profit growth, marking the biggest cuts at the Santa Clara, California-based company in four years.

Marc Eckelberry : 9/1/2006 10:43:06 AM

Can't get away from this action quite yet. NQ is holding on to 1587.75, it could signal a pre-lunch bid. The pivot is holding for now. I will leave the decision up to you, take a safe 8 or 9 NQ points now, or less profit with the stop higher. Always a tough choice, but my philosophy is always small losses / big gains, not small losses / small gains.

Marc Eckelberry : 9/1/2006 10:25:30 AM

I have to go, book +9 now if you want, for others who are more adventurous, leave the stop at 1592.25, a guaranteed +3, but potential to 1575 and next week even lower. I have no problem holding over a short on a three day weekend with the events unfolding if I have a cushion. I never hold a long over the weekend with futures, unless it's gold. But a short under these conditions? You bet.

Jane Fox : 9/1/2006 10:23:07 AM


Marc Eckelberry : 9/1/2006 10:22:04 AM

Oil is dropping slightly on the weak housing. NQ has immediate rsistance at 1587.75, July gap open.

Marc Eckelberry : 9/1/2006 10:16:12 AM

Today's gap is pretty much closed, so cover the short if you want to book profits. This is a scalp day, as we could very well rally back up to 1595. Right now, resistance is 1590.50, lower the stop to 1592.25, lock in +3. Let's play it safe. The big boyz will leave soon and small traders could give this a bid.

Marc Eckelberry : 9/1/2006 10:16:54 AM

I was worried I would get egg on my face by calling for a sell-off at highs, but it worked. Always tough going against the herd, but it was the play today, at least so far.

Marc Eckelberry : 9/1/2006 10:19:31 AM

I have a fundamental disagreement with all those calendar players out there. In fact, the ONLY calendar play that has been valid this year is to do exactly the opposite of last year. That means a drop the first 2 weeks of September. That has been my gut feeling since yesterday and I am sure glad I went short at today's highs. If I'm wrong, so be it, but when I see the SOX selling at critical resistance 2 days in a row, I get bearish. In any case, no risk now, stop is at even.

Jane Fox : 9/1/2006 10:09:21 AM

WASHINGTON (MarketWatch) - An index of pending home sales fell 7% in July to lowest level since February 2003, the National Association of Realtors reported Friday.

The index is down 16% in the past 12 months. Every other housing indicator shows a similar decline in the past year.

"The index shows existing-home sales should continue to ease after a stronger-than-expected decline in July, but are likely to flatten in the months ahead," said David Lereah, chief economist for the realtors.

Jane Fox : 9/1/2006 10:08:50 AM

WASHINGTON (MarketWatch) -- Spending on U.S. construction projects fell by 1.2% in July, dragged down by a sharp drop in private residential construction, the Commerce Department said Friday.

Spending on home-building fell by 2.0% in July, the lowest rate since March 2005, another sign of the slowing housing market that has cooled the pace of the overall economy.

Wall Street economists surveyed by MarketWatch were expecting construction spending to be flat in July

Marc Eckelberry : 9/1/2006 10:06:17 AM

Short NQ 1595.25, lowering stop to even.

Marc Eckelberry : 9/1/2006 10:06:01 AM

Now everyone is confused. Looks like economic weakness, ZB caught a small bid, but the jobs data is what Bernanke watches the most, so that should win in the end. In other words, the probablility of a rate hike in September will start getting priced in and the market is not going to like that idea if there is a sign the economy is too weak.

Jane Fox : 9/1/2006 10:01:39 AM

* July construction spending falls 1.2% -

Jane Fox : 9/1/2006 9:57:55 AM

Here is McMillan's weekly commentary. - The market is dull and slowly rising once again. Month-end window dressing has been a boon to the bulls, as day after day this week we've seen a substantial amount of buy programs -- evident from the high TICK readings that have occurred. Usually, this type of buying spills over in the first three days of the ensuing month, but sometimes that's not true of September, when the number of players increases after the Labor Day weekend. With September being the weakest month of the year, one wonders if the bulls can hold this rally together when the window- dressing ends.

It is going to be interesting to see how next week plays out. It's unlikely to be more of the same. Rather, we would expect much more volatility. One scenario is that the bulls will win the day, and the positive technical indicators that we currently see will aid the market in moving higher. But the other, bearish, scenario is that selling pushes the market lower to begin with, followed by sell signals from the technical indicators, and then a general breakdown of prices. Either seems plausible.

Take market breadth, for example. It has been quite positive the last few days -- especially on the NYSE. Overbought breadth is a positive sign while it lasts, but if the advance-decline numbers turn negative, breadth will generate a sell signal fairly quickly,

$VIX is in a similar state. It is very low (i.e., overbought). But as long as it remains low, the market can rally. Today, $VIX is hovering below 12.20. However, if selling were to begin, $VIX could easily begin to move higher, and after a couple of days of that $VIX would be trending higher -- a sell signal.

On the other hand, the equity-only put-call ratios are not currently overbought. In fact, they are quite the opposite, having remained high on their charts for several weeks now. We have been waiting for them to at least drop below the early August lows to re-confirm their bullish downtrends. Yesterday's action nearly accomplished that, as the put-call ratios dropped. This indicator is far less likely to give a sell signal right away, even if the market initially declines after Labor Day, but it is still possible that it could.

Finally, there is the matter of the $SPX chart itself. $SPX is in an uptrend, and there is also underlying support at 1290. If that 1290 area gives, way, then the first target would be support at 1280. If that doesn't hold, things could get ugly again.

So, for now, things are positive. But it wouldn't take much for deterioration to set in -- especially if $SPX falls below support at 1290. So, take some partial profits and tighten your stops, but maintain long positions for now.

Jane Fox : 9/1/2006 9:56:02 AM


10:00a.m. August ISM Mfg Index. Previous: 54.7.

10:00a.m. July Construction Spending.Previous: +0.4%.

10:00am July Pending Home Sales.Previous: +0.4%.

Jane Fox : 9/1/2006 9:54:26 AM

WASHINGTON (MarketWatch) -- U.S. consumer sentiment improved in late August, according to media reports of proprietary research from the University of Michigan. The final August UMich consumer sentiment index rose to 82.0 from 78.7 in early August, but the index was down from 84.7 in July. The final UMich current conditions index rose to 103.8 from 103.5 in July and 100.8 in early August. The final UMich expectations index rose to 68.0 from 100.8 in early August, but was down from 72.5 in July.

Jane Fox : 9/1/2006 9:52:48 AM

NQ is now testing its PDH and YM retests its.

Marc Eckelberry : 9/1/2006 9:51:47 AM

The summer rally is over if SMH can't get back above 34.30 soon. Support was 34.

Jane Fox : 9/1/2006 9:51:45 AM

ER is on its way to test overnight lows at 721.50.

Jane Fox : 9/1/2006 9:50:20 AM

YM tags its PDH and finds support.

Marc Eckelberry : 9/1/2006 9:49:36 AM

That's two days that the SOX is trading red. Even with the news that INTC might cut 20K jobs. It could all turn around of course, but we wil see what happens in 10 mns with the ISM numbers. Watch bonds, watch bonds!

Jane Fox : 9/1/2006 9:49:25 AM



Marc Eckelberry : 9/1/2006 9:47:06 AM

Nope, ZB just decided to sell off some more.

Jane Fox : 9/1/2006 9:46:48 AM

Watching the news wires for the Consumer Sentiment Index.

Marc Eckelberry : 9/1/2006 9:46:03 AM

Stops should be no higher than 1596. Just in case they do go for the gap close at 1601.75. Bonds are finding a light bid.

Marc Eckelberry : 9/1/2006 9:43:33 AM

Now watch NQ 1590.50 support.

Jane Fox : 9/1/2006 9:42:43 AM


Marc Eckelberry : 9/1/2006 9:42:28 AM

I'm short NQ 1595.25.

Marc Eckelberry : 9/1/2006 9:42:13 AM

SOX and SMH red. I had a feeling, as the song goes.

Jane Fox : 9/1/2006 9:42:06 AM



Marc Eckelberry : 9/1/2006 9:41:11 AM

Depends on bonds now. Watch ZB 110 12/32 level. A drop below that will be bearish. But for now, we are holding.

Jane Fox : 9/1/2006 9:40:11 AM

Markets are all peeking above resistance but not sure if they will continue this trek into uncharted (uncharted for a few months anyway) territory.

Marc Eckelberry : 9/1/2006 9:40:11 AM

That could have been it. Still have that July gap close at 1601.75, but NDX hit 200 ema and SMH hit double top at its 200 ema.

Jane Fox : 9/1/2006 9:32:32 AM

VIX opens within its PDR but the TRIN well below supporting the bullishness.

Jane Fox : 9/1/2006 9:31:51 AM

AD line is a bullish +615 and AD volume above 0. The bulls have the ball this morning.

Jane Fox : 9/1/2006 9:31:15 AM

The big caps open above their respective PDHs. ER opens within its PDR.

Jane Fox : 9/1/2006 9:30:00 AM

Here is why Gold is down today

NEW YORK (MarketWatch) -- The dollar rose against the euro and traded little changed against the yen early Friday after a Labor Department report showed job growth continued at a moderate pace in August

Jane Fox : 9/1/2006 9:26:55 AM

Remember - 9:45a.m August University Of Michigan Consumer Sentiment Index.

Jane Fox : 9/1/2006 9:25:46 AM

Anyone think Natural Gas is ready for a bounce? If this were not a long weekend I would certainly take a long here but I will not hold a Natural GAs futures position over 3 days. Link

Marc Eckelberry : 9/1/2006 9:24:33 AM

They see you coming.

Jane Fox : 9/1/2006 9:22:18 AM

I agree Marc. Bonds falling is not bullish for the equity markets.

Marc Eckelberry : 9/1/2006 9:21:51 AM

I think it would be wrong for traders to assume a rally today is a slam dunk. Everyone is leaning that way, but I don't like the drop in bonds and gold. I don't doubt we could test 1595 after the open and possibly even close that gap at 1601.75. I'm not sure we won't sell off from there. Watch 1590.50.

Jane Fox : 9/1/2006 9:17:58 AM

If you are watching for a breakdown keep your eye on this market because I think it would be the first market to break support. Link

Jane Fox : 9/1/2006 9:15:11 AM

On August 29 MACD and RSI were making higher highs which suggested to me the ER would be the first market to break resistance. I noted then that it was a bullish sign for the other markets as well. Link

Marc Eckelberry : 9/1/2006 9:11:47 AM

The spike high on news is right below R2 for NQ.

Jane Fox : 9/1/2006 9:11:40 AM

YM's support is less clear than ES's so even if you trade YM use ES as your guide. YM's support should be the bottom of the channel but bulls should not panic if that line breaks, however, they should start to get worried if the 50and 100 EMAs break. Link

Marc Eckelberry : 9/1/2006 9:09:14 AM

An explosive move to the upside could see 1620 if NQ closes the July gap at 1601.75. Support is now 1587.75, gap open. Today's gap close would be 1583.

Keene Little : 9/1/2006 9:08:25 AM

I had mentioned in last night's Wrap that I thought the market would rally today and that the response to the economic reports would be positive no matter what the reports say. The pundits will spin it the way the market goes just so they look like they know what they're talking about. To which I say they're full of donkey dust but then you know my feelings about market analysts, present company on the Monitor excluded of course ;-)

The sideways consolidation the past couple of days is bullish so I'm looking for another leg higher. But that should be the last leg up and then I'll be looking to get short for a longer term run (multi-month). DOW 11465 and SPX 1314 are potential upside targets to watch for weakness.

I've got to run some errands this morning and should be back by about 11:00 AM.

Jane Fox : 9/1/2006 9:07:26 AM

I still maintain 1290-1291 is ES's first support and then 1280. If the bears are able to close this market below 1280 it would mean this rally is done. However, I don't see that happening. I think we could make new yearly highs before the selling starts. Link

Marc Eckelberry : 9/1/2006 9:05:11 AM

On days like this, you need to watch gold and bonds to figure out what smart money is thinking. And right now it looks like higher rates all of a sudden. We still have the ISM numbers later, but if I see gold sell off some more, I would consider the equity run to be near its end, at least short term. Gold is a hedge against inflation, if they are dumping in conjunction with a higher dollar it means Feds will take pre-emptive action, negating the need for gold as a hedge. The signal is not reliable unless it is confirmed with bond weakness, which is the case so far. It's not dramatic, so I will wait to see what the ISM numbers does. Nevertheless, caution is warranted. NQ has a gap to close just above 1600.

Marc Eckelberry : 9/1/2006 8:57:01 AM

ZB selling and gold is red as well. That could indicate a rate hike slowly creeping in. That would not be bullish.

Jane Fox : 9/1/2006 8:56:09 AM

LAPPEENRANTA, Finland -- The European Union said Friday that it was too early to impose sanctions on Iran for its failure to halt uranium enrichment by a U.N.-imposed deadline, and announced it would be meeting early next week with Iran's top nuclear negotiator.

"For the EU, diplomacy remains the No. 1 way forward," said Finnish Foreign Minister Erkki Tuomioja, whose country holds the rotating EU presidency. He added that "this is not the time or place" for the international community to hit Iran with sanctions over its nuclear program.

Iran defied a Thursday U.N. Security Council deadline to stop uranium enrichment, raising the prospect of U.N. economic and other sanctions. In Tehran, Iranian President Mahmoud Ahmadinejad reiterated that his country wouldn't be bullied into giving up what he called Iran's right to nuclear technology.

Can someone please tell me why they even bothered to put a deadline on if it was going to mean nothing.

Jane Fox : 9/1/2006 8:52:43 AM

It is always worthwhile to note overnight highs and lows but when you have a volatile overnight session like this one it becomes all the more important.

Marc Eckelberry : 9/1/2006 8:49:39 AM

Hmm. Will interest rate hike fears come back to haunt us next week?

Jane Fox : 9/1/2006 8:48:52 AM

This has nothing to do with the market but I thinking interesting

OMAHA, Neb. -- Billionaire investor Warren Buffett married his longtime companion Astrid Menks on Wednesday, his 76th birthday.

Mr. Buffett's daughter Susan hosted the 15-minute ceremony at her Omaha home, according to the Omaha World-Herald, which reported the wedding. Mr. Buffett, chairman and chief executive of Berkshire Hathaway Inc., and Ms. Menks, 60 years old, have no plans for a honeymoon, the newspaper said.

"It's her only and his last [wedding]," Susan Buffett said, recalling her father's take on the ceremony.

Mr. Buffett's first wife, Susan, died July 29, 2004, at age 72. She moved to San Francisco in 1977, but the two remained married and were together often and talked frequently when apart.

Mr. Buffett, the world's second-richest person after Bill Gates, announced in June that he would bequeath the bulk of his roughly $44 billion fortune to the Bill and Melinda Gates Foundation. He donated the first 500,000 shares of Class B stock last week.

Jane Fox : 9/1/2006 8:46:46 AM

Dateline WSJ - WASHINGTON -- U.S. jobs grew last month consistent with Wall Street expectations, and jobs growth in the previous two months was revised higher. Meanwhile, the unemployment rate fell slightly last month.

Nonfarm payrolls increased 128,000 last month after growing a revised 121,000 in July and 134,000 in June, the Labor Department said Friday. Previous reports had shown a 113,000-job expansion in July and a 124,000-job increase in June.

The unemployment rate dipped a bit to 4.7% in August from 4.8% in July.

Average hourly earnings rose $0.02, or 0.1%, to $16.79. That was up 3.9% from a year earlier.

The jobs data were largely consistent with Wall Street expectations. The median estimate of 23 economists polled by Dow Jones Newswires had projected a 130,000 payroll increase and a 4.7% unemployment rate. Wage growth was somewhat less than expected, as surveyed economists had projected a 0.3% monthly increase in average hourly earnings.

The Labor Department report -- which was about in line with the latest four-month moving average of 117,000 jobs gains a month -- suggests the U.S. jobs market remains relatively strong.

Monetary policymakers at the Federal Reserve expect slowing economic growth to ease price pressures that have recently pushed core inflation beyond their comfort level. That expectation underpinned the Fed's decision last month to pause its credit-tightening cycle after two years of consecutive interest rate increases.

Jane Fox : 9/1/2006 8:45:15 AM

AT first TBonds didn't like the employment then they did. I like to follow the bonds reaction to these data because bonds traders are a savvy bunch but this morning they seem totally confused.

Natural Gas continues to make lower lows. This is odd as well because we are into hurricane season which is usually bullish for Gas.

Oil had a neutral overnight session.

Gold was bearish overnight - I bet the $ was up. Link

Jane Fox : 9/1/2006 8:39:02 AM

The markets really liked the employment data out at 8:30. This bullishness could be the catalyst that breaks resistance. Link

Jane Fox : 9/1/2006 8:36:28 AM

Nonfarm payrolls increased by 128,000 in August and jobs growth in the previous two months was revised higher. The unemployment rate fell to 4.7%.

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