On Friday we got the unemployment data that I have been previewing this week.  Here is the first paragraph from the report.

The unemployment rate fell from 10.0 to 9.7 percent in January, and nonfarm
payroll employment was essentially unchanged (-20,000), the U.S. Bureau of
Labor Statistics reported today. Employment fell in construction and in
transportation and warehousing, while temporary help services and retail
trade added jobs.

If you just read that paragraph and that is all you heard on unemployement, you are probably scratching your head. I got the same question all day.  How can we lose 20,000 jobs in a month and see the unemployment rate go down 0.3%?  Well, it is due to all the revisions that are made to the data.  The short answer is, the population shank and so did the labor force.  I would like to point out a small table the BLS includes at the back of the report.  This is Table A-15 for those of you scoring at home.

I know the table is small, but if you click on it, it will open a new window.  I want to point out the last line item on the table, U-6.  U-6 is Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.  I call this the ‘real’ unemployment rate.  This came in at 18% for January not seasonally adjusted and 16.5% seasonally adjusted.  I think this number gives you a better idea of the unemployment rate today.

Now I would like to comment about Friday’s market action.  The markets were flat/slightly lower through the first half of the trading session on Friday, and started to drift lower mid-day.  All of the sudden at 3 o’clock, BAM, the market shot higher.  Here is the action in visual form (look at the long green bar at 3PM).

I saw an 8.1 million share trade go through on the (SPY: 110.41 +0.77).  That is roughly $860 million.  That was followed by about 300,000 shares of the (SPY: 110.41 +0.77) that went through the desk at (JPM: 39.12 +0.84).  Short term, I would say the market is being defended here.  It is also very curious that the DJIA closed just above the magical 10,000 level.

The charts are still battered and bruised.  This market still is oversold (-46 on the NASDAQ McClellan Oscillator).  I continue to be on the sidelines waiting for charts to repair themselves and set-up with good buy points.

Happy hunting!