Urban Carmel

NFP thread: here's why today's -92k (Feb) plus -69k (in revisions) is bad news

bsky.app/profile/ukar...

You and me both

This is not an oil shock (yet)

Motherhood and apple pie:

60': lower low and lower high = weakening upside, strengthening downside (1st chart).

Weekly: breaking 20-wma after multiple hits the past several weeks. Hanging by a toenail (2nd)

Monthly: uptrend still intact until 10-mma breaks at EOM (3rd)

Today's low comfortably above last month's low. Given events, that's kind of impressive. Net, nothing's changed.

Choose your breadth narrative

Full article: www.morningstar.com/news/marketw...

cont. This isn't a strategy for making money in the market. Over time, the money is made holding (the relatively fewer) large caps - companies that make money - not speculating in the (large number of) companies that lose money. I know, kind of intuitive, but the breadth bros never get this 3/3

cont. Microcaps are mostly loss-making companies, much more so than small caps or large caps. So, in other words, the expansion in breath is coming as a result of investors embracing the worst, most risky stocks. 2/3

Mark Hulbert: the apparent improvement in some breadth indicators last past few months is being driven by microcap stocks, not small caps or large caps 1/3

Literally, nothing has changed. The chart above was from the low early this month. Up since then, holding >20-wma (LHS) and just ping ponging back and forth in a range the last 3 months (RHS)

With 2 days to go in February: the high was on the first trading day of the month; the first half of February lost -1.5% and the second half gained it all back. The trading range for the month has been the tightest in nearly 3 years. The first seasonality chart above ok, the second not so much

Here's yet another way to look at breadth, this one says it's narrowing. It could mean nothing (like the early 2000s) or we could be on the verge of a 20% drop (like 2011, 2015, 2022 and 2025). How anyone uses this to make money - and not just be a market commentator - is a mystery

With hindsight we'll find out which of these breadth indicators was prescient. That's how this works bsky.app/profile/mich...

It’s now been halved because…

bsky.app/profile/carl...

Waymo. It’s very polite, let’s everyone go first, follows the rules and because it drives at the speed limit it takes a bit longer. I’m a fan

Seasonality telling you either low is in the first part of the month and the high at the end or it’s the exact opposite

Breadth telling you either market is bullish AF or we will have a major correction.

I walked away from X nearly two years ago and still made this list :)

Putting those job losses in perspective: there was nothing like that during expansions between 1991-2001, 2003-07 and 2010-20. June 1986 (-93k) was a one off (circled) during the 1983-90 expansion.

June, August and October NFP revised lower to -20k, -70k and -140k. Scroll up for why that matters.

It’s the ability to service debt that matters. CA is not even in the top 10

Bill Gates has more debt than me. He also has more income.

From Spring 2025 bsky.app/profile/ukar...

Real retail sales flat yoy. There’s nothing new here; its been at this level going on 5 years

Weekly low right on the 20-wma (arrows). We've been down there twice in recent weeks. Normally, that signals a weakening trend (as also shown by RSI and MACD). You don't want to go back down there anytime soon

Thanks to everyone for pointing out that equal weight is outperforming SPY so for this year. It's been destroyed for more than a decade, during which time SPY is up 270%

This was the low. SPY made successive ATHs, climbing 7% in the next 2 months.

SPY is now back to its 20-wma (677). Deeper correction awaits if it fails (arrows)

Down 70% after being down 84%. It's now cheaper than ever to bribe the president

So, the positive return in January is a good sign as “double red” years are stinkers but - given December’s better track record than January - maybe temper your expectations a bit