GDP and Jobless Claims, Oh, My!

Where to start?  The second GDP revision printed at 1.8%, well below the expected 2.2%.  The even less encouraging info comes in the revisions to 1st quarter GDP, where we learn that the inventory numbers and consumer consumption were wildly wrong.  With the adjusted PCI  and ex the inventory build, 1st quarter was actually less than 1%  When the current inventory levels were reported earlier this week, we saw that Inventories were at record levels.  When manufacturers begin to reduce inventories, instead of adding to inventories, the economy will quickly slip into contraction.  Does that mean Stagflation as some are suggesting?  Or would it more properly be named Recession?  Or perhaps even Depression?  Will it even matter what it is called?

The other good news this morning was the BLS New Jobless Claims report.  The print came at 424,000, well above last weeks 404,000.  Of course it is only fair to note that last week was revised higher to 414,000.. a 10,000 lost-jobs miss.   More of the old same-old, same-old.

The market was slightly lower overnight, and opened flat to mixed.  As this is written, the Dow is off 21 and the SPX is off 0.72The other major indexes are mostly flat.  Oil  is trading down at 100.60 and Brent is also down, trading 114.30.  Gold is off 1/2% at 1519.30 and Silver is at 37.05  The remaining commodity complex is mixed with the biggest move in Wheat, up 2.25%.

The Euro surged overnight and gaped higher on the open, trading currently at 141.02, well off its high at 1.42.  It was a large enough move to stop me out of the FXE short.  The big surprise move was triggered by reports that China was a major buyer.  The Dollar is weak, trading at 75.76.  Bonds are mostly higher, with the Note at 3.07% and heading for sub 3% and the Bond is at 4.23%

We have now been stopped out of everything except the QID and the TLT   The stopped out trades were all profitable except the FXE, which lost 19 cents.  Depending on market action, I will be looking to re-enter the market. I have added the Shanghai index to the list of indexes and its Proprietary Momentum Change indicator.  I was going to only report the domestic indexes, but I have had requests for SSEC.  You will note that the Sell signal was first generated on 4/22/2001, and the SSEC is considered by many technicians to be a leading indicator for the domestic markets.

Also, note that the stop loss for QID has again been raised.

Best To Your Trading.

Bill