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US Jobless Claims Rise!
By Mike Conlon | January 21, 2010
I don’t know why I even bother to express surprise anymore when every economic figure that comes out is “unexpected”. Trying to peg certain figures by using analyst expectations can be a fool’s folly. Let’s take today’s US Jobless claims figures which showed a rise of 36K more claims, as opposed to the analyst expectation of a small decrease.
As a result, the equity markets did an about face and proceeded to sell despite the fact the Goldman Sachs reported “record earnings”. Don’t lose sight of the fact that this comes on the back of the US taxpayer, but what’s a few billion dollars among friends?
So now that the stock market is down considerably, we have switched from mild risk-taking to risk aversion. This means that both the US dollar and Japanese yen are now the favored currencies of the day. Let’s take a look at a chart of the Aussie/Yen (AUD/JPY) to show the extreme volatility of this move. (click chart to enlarge)
As you can see, the market is still VERY skittish regarding any bad economic numbers that will show the recovery is not moving along as may have been previously thought. In markets as volatile as these, it’s important to keep tight stops and to look for reversals. As the new year is just starting, the markets are trying to find some sort of direction in what can only be described as “rudder-less ship trading”. In other words, extreme volatility.
As a quick aside, this AUD/JPY pair is down another 30 pips to 82.35 in just the time its taken me to put up this post. Wow. If you own stocks, today might be an ugly day.
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Topics: What To Look At In The Market |