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 Post subject: December 6th Friday Trade Results - Profit $230.00
PostPosted: Fri Dec 06, 2013 8:03 pm 
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Joined: Sat Jan 10, 2009 2:06 pm
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Trade Results of M.A. Perry
Trader and Founder of WRB Analysis (wide range body/bar analysis)
Price Action Trading (no technical indicators)
Phone: +1 708 572-4885
Free Chat Room: http://www.thestrategylab.com/tsl/forum/viewforum.php?f=164
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click on the above image to view today's performance verification

Price Action Trade Performance for Today: Emini TF ($TF_F) futures @ $230.00 dollars or +2.30 points, Emini ES ($ES_F) futures @ $0.00 dollars or +0.00 points, Light Crude Oil CL ($CL_F) futures @ $0.00 dollars or +0.00 points, Gold GC ($GC_F) futures @ $0.00 dollars or +0.00 points and EuroFX 6E ($6E_F) futures @ $0.00 dollars or +0.0000 ticks. Total Profit @ $230.00 dollars.

Russell 2000 Emini TF Futures: 1 tick or 0.10 = $10.00 dollars and there's more contract information @ The ICE
S&P 500 Emini ES Futures: 1 tick or 0.25 = $12.50 dollars and there's more contract information @ CMEGroup
Light Crude Oil CL (WTI) Futures: 1 tick or 0.01 = $10.00 dollars and there's more contract information @ CMEGroup
Gold GC Futures: 1 tick or 0.10 = $10.00 dollars and there's more contract information @ CMEGroup
EuroFX 6E Futures: 1 tick or 0.0001 = $12.50 dollars and there's more contract information @ CMEGroup

In addition, all of my trades were posted real-time in the chat room. You can read today's chat room logs for details about each one of my trades via price action trading from entry to exit (e.g. time, price, contract size) along with price action commentary as the trade traversed to its completion...all archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=124&t=1668

Also, posted below are direct links to information about my price action trade methodology and trading plan (there's a difference between the two) that enables me to identify key trading areas in the price action that represent changes in supply/demand and volatility along with being able to exploit these changes via WRB Analysis (wide range body/bar analysis). I'm primarily a day trader because it suits my personal lifestyle but I do occasionally swing trade and position trade. Simply, my trade method is applicable for position trading, swing trading and day trading.

Image Price Action Analysis via WRB Analysis Tutorials @ http://www.thestrategylab.com/WRBAnalysisTutorials.htm and there's a free study guide of the WRB Analysis Tutorial Chapters 1, 2 and 3 @ http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=119&t=718

Image Trade Signal Strategies via Volatility Trading Report (VTR) @ http://www.thestrategylab.com/VolatilityTrading.htm and there's a free trade signal strategy @ http://www.thestrategylab.com/tsl/forum/viewforum.php?f=89 so that you can freely test drive one of our price action trade strategies with support prior to purchasing the Volatility Trading Report (VTR).

Image Trading Plan Daily Routine @ http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=226&t=2114

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Market Context Summaries

The below summaries by Bloomberg, CNNMoney, Reuters and Yahoo! Finance helps me to do a quick review of the fundamentals, FED/ECB/BOE/IMF actions or any important global economic events (e.g. Eurozone, MarketWatch.com) that had an impact on today's price action in many trading instruments I monitor during the trading day. Simply, I'm a strong believer that key market events causes key changes in supply/demand and volatility resulting in trade opportunities (swing points and strong continuation price actions) that reach profit targets. Thus, I pay attention to these key market events, intermarket analysis (e.g. Forex EurUsd, EuroFX 6E futures, Gold GC futures, Light Crude Oil (WTI) CL & Brent Oil futures, Eurex DAX futures, Euronext FTSE100 futures, Emini ES futures, Emini TF futures, Treasury ZB futures and U.S. Dollar Index futures) while using WRB Analysis from one trade to the next trade to give me the market context for price action trading before the appearance of my technical analysis trade signals. Therefore, I maintain these archives to allow me to understand what was happening on any given trading day in the past involving key market events to help better understand my trade decisions (day trading, swing trading, position trading)...something I can not get from my broker statements alone.

Dow Soars 200 Points On Jobs Report

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click on the above image to view today's price action of key markets

NEW YORK (CNNMoney)
Good news may finally be good news. The Dow Jones Industrial Average surged nearly 200 points Friday, as investors cheered a better-than expected November jobs report.

The S&P 500 and the Nasdaq also finished the day markedly higher.

Despite snapping a five day losing streak, the Dow and S&P 500 weren't able to edge out wins for the week. The blue chip indexes had gained the previous eight weeks.

And given how much stocks are up so far in 2013, it's still far from certain whether the market will experience a so-called "Santa Claus rally," a trend in which the market rises at the end of the year.

On Friday, the Labor Department said the economy added 203,000 jobs in November, higher than the 183,000 estimated by economists surveyed by CNNMoney.com. The unemployment rate dropped to 7.0% from 7.3%. It was expected to fall to 7.2%.

For months, investors have been sweating the Federal Reserve, trying to calculate when it will scale back, or taper, its massive $85 billion per month stimulus program. The Fed has said that improvement in the job market was one of the main things it was looking for before it would start trimming its bond purchases.

Earlier Friday, the bond market seemed to be betting that the Fed may taper sooner rather than later. The yield on the 10-year Treasury note spiked as high as 2.93% before pulling back to 2.86%. The 10-year yield peaked earlier this year at 2.98% when investors were last worried that tapering could be imminent.

Bond yields rise when prices fall. So investors may have been selling bonds immediately following the jobs report on expectations that the Fed is closer to slowing down its monthly Treasury purchases.

But there's no consensus for when the taper will come to fruition.

"US Jobs Stronger than Expected, but not Enough for Fed to Taper," was the title of a morning note from Brown Brothers Harriman.

"US payrolls strength boosts QE3 taper chances" was another from Capital Economics.

Market up on good news? Pinch me!

The Fed's next policy meeting wraps up on December 18. It is the second-to-last meeting that will be led by Fed chair Ben Bernanke. He will likely be replaced by current vice chair Janet Yellen, who has been nominated by President Obama to be the next Fed chair and is merely awaiting approval from the Senate.

Many economic experts and investment strategists believe that Bernanke would prefer to have Yellen be in charge of the Fed's tapering as opposed to him starting it just before his term expires.

What's moving: Struggling retail giant J.C. Penney (JCP, Fortune 500) plunged more than 8% after it disclosed Thursday that the Securities and Exchange Commission has an inquiry about its finances.

Shares tumbled 8% Thursday after hedge fund manager Kyle Bass told Bloomberg that his firm no longer owns the stock. J.C. Penney's stock had been rallying lately due to purchases from Bass and other hedge funds.

"$JCP great buying opp. love it" said StockTwits trader investinthebest, who's still bullish despite Friday's sell off.

Shares of Ulta Salon (ULTA), the cosmetics superstore, tanked 20% after the company posted weaker than expected results and lowed its fourth quarter outlook.

"$ULTA shoosh, there it goes," quipped StockTwits user skipjackrick.

But another StockTwits trader is looking for a buying opportunity.

"$ULTA I'm just about ready to jump in," said NMGold.

Big Lots (BIG, Fortune 500) fell more than 12% after its earnings came in below analyst expectations.

Related: When will Facebook be added to the S&P 500?

Drug store chain Rite Aid got a 2% bump, and one trader felt the momentum was justified.

"$RAD This is a real stock this company is going to grow and shares are going to grow with it," said Digger1.

Sears Holdings (SHLD, Fortune 500) shares dropped almost 4% after the retailer officially said Friday it plans to spin off its Lands' End clothing brand.

Shares of Intel (INTC, Fortune 500)and career networking site Linkedin (LNKD) bounced after receiving upgrades from analysts.

European markets finished higher in afternoon trading on the heels of the U.S. jobs report while Asian markets, which closed before the jobs report was released, ended mixed.

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4:20 pm: [BRIEFING.COM] A solid November employment report translated into a solid day of gains for the major averages. While there was some talk that the encouraging job growth raised the odds of the Fed announcing a tapering at its December meeting, the message of the markets today was either that it didn't believe there would be a tapering this month or that it doesn't fear a tapering this month.

It was just one day, yet there was ample meaning wrapped up in the connection that the 10-yr Treasury note (+3/32, 2.87%) and the stock market both pushed higher. Gold prices and the US Dollar Index, meanwhile, were little changed.

The headlines for the employment data were reassuring on just about every front.

Nonfarm payrolls increased by 203,000 (Briefing.com consensus 188,000) and were revised up for September (to 175,000 from 163,000) and down slightly for October (to 200,000 from 204,000)
Nonfarm private payrolls increased by 196,000 (Briefing.com consensus 200,000)
The unemployment rate fell to 7.0% from 7.3%
Average hourly earnings increased by 0.2% (Briefing.com consensus 0.2%) while aggregate earnings increased 0.6% (a good portent for consumer spending)
The average workweek edged up 0.1 to 34.5 hours (Briefing.com consensus 34.5) and factory overtime increased 0.1 to 3.5 hours

The employment report drowned out the Personal Income and Personal Spending report for October, which was released at the same time. That report was mixed with personal income declining 0.1% (Briefing.com consensus 0.3%) and personal spending rising 0.3% (Briefing.com consensus 0.3%).

There was nothing mixed, however, about the stock market action. It was decidedly positive throughout the day and featured broad-based participation that saw every S&P sector finish higher, every Dow component finish higher, and all major indices gain at least 0.7%.

Remarkably, the S&P 500 made up almost the entirety of the ground it lost in its five-session losing streak and came within a whisker of ending higher for the ninth straight week.

The consumer staples (+1.5%), industrials (+1.5%), financial (+1.4%), materials (+1.4%), and health care sectors (+1.4%) led today's winners. The energy sector, which gained 0.5%, was the weakest performer -- but it wasn't weak.

Weak areas were few and far between today. A number of retailers, though, were caught in the selling crosshairs after issuing disappointing guidance. Big Lots (BIG 32.50, -4.63), American Eagle Outfitters (AEO 14.85, -1.55), and Five Below (FIVE 45.30, -2.45) were such offenders. J.C. Penney (JCP 8.09, -0.76), meanwhile, got hit hit hard after a 10Q filing revealed an SEC request for information regarding the company's liquidity, cash position, and debt and equity financing.

Another area of notable weakness was the CBOE Volatility Index (VIX 13.81, -1.27). It dropped 8.5% as portfolio protection bets were taken off in the risk-on advance.

Today's gains came on lighter-than-expected volume. To that point, NYSE volume totaled 671 mln shares versus 700 mln on Thursday.

Nasdaq +34.5% YTD
Russell 2000 +32.9% YTD
S&P 500 +26.6% YTD
DJIA +22.1% YTD

3:30 pm: [BRIEFING.COM] Precious metals bounced around in volatile trade during early morning pit action following better-than-anticipated economic data. Payroll and Michigan Sentiment data topped expectations while the unemployment rate dropped to 7%.

Both Feb gold and Mar silver fell to their respective session lows of $1210.10 and $19.17 per ounce and quickly rebounded into positive territory and to respective session highs of $1245.00 and $19.78 per ounce. The metals then consolidated near the break-even line and spent the remainder of the session chopping around near that level. Gold settled 0.2% lower at $1229.10 per ounce, booking a 1.7% loss for the week. Silver closed 0.2% lower at $19.53 per ounce, bringing losses for the week to 2.5%.

Jan crude oil rose for a sixth consecutive session in choppy trade following the strong economic data. The energy component rallied to a session high of $97.99 per MMBtu and spent most of the remaining session trading slightly above the unchanged line. It settled 0.3% higher at $97.70 per barrel, booking a 5.4% gain for the week, its biggest weekly gain since July.

Jan natural gas climbed to a session high of $4.20 but was unable to hold the gain. It slipped into the red in afternoon floor action and settled 0.2% lower at $4.12 per MMBtu. Despite today's dip, natural gas gained 4.0% for the week.

3:00 pm: [BRIEFING.COM] Pretty much a sideways drift for the market right now. Notwithstanding that mundane action, the final hour is apt to be a little more lively as participants reconcile whether they want to maintain their positions going into the weekend or take some money off the table.

The S&P 500 has a little work to do if it wants to record its ninth straight winning week -- something it hasn't done in 10 years. The level to beat is 1805.81.

In a day that has been noteworthy for its economic data, it is only fitting that there is one more report on the docket -- well, there was one on the docket. The Consumer Credit report for October was just released by the Federal Reserve and it showed that consumer credit increased by $18.2 bln. That was higher (and better) than the Briefing.com consensus estimate of $15.8 bln.

2:30 pm: [BRIEFING.COM] A run to new session highs, a dip, a run back to session highs, and another dip... that has been the shape of things in the last 30 minutes as market participants feel out the next leg of today's action.

There haven't been any real cracks in today's leadership groups, and without that happening, the stock market stands a good chance of at least finishing the day near its best levels. There is still a lot of time left in the session, but with another favorable catalyst on the horizon next week (i.e. a budget agreement), participants may be reluctant to trim positions going into the weekend.

One item to watch as the remainder of the session unfolds is the yield on the 10-yr note. Some recent selling has erased today's modest gains for the 10-yr, which is now down two ticks with its yield at 2.88%. A move to 2.90% or higher could curtail some of today's enthusiasm in the stock market.

1:55 pm: [BRIEFING.COM] It is going to be an interesting finish to the day. In the last 30 minutes, some added buying interest pushed the Dow and S&P 500 to new highs for the session.

In the process, the S&P 500 also turned positive for the week, pretty much erasing any concerns heard as recently as yesterday that it had gone down for five straight sessions.

Now, the race is on to see if the S&P 500 can record its ninth straight winning week. It is just below that performance bar with a little pushback since reaching the aforementioned high.

Technically, the S&P 500 cleared a resistance level at 1804/1805, which opens the door for a possible run to the next resistance point at 1812/1813.

1:30 pm: [BRIEFING.COM] Sellers remain largely at bay, so the major indices have been able to keep on keepin' on near their highs for the day. The Nasdaq, which tuned positive for the week, is actually trailing the other major indices today with a 0.7% gain.

Apple (AAPL 561.80, -6.11) has been a drag on the Nasdaq, but otherwise there has been some pretty good support for the Composite.

Intel (INTC 25.00, +0.74) is acting as an offset of sorts as it benefits from a Citigroup upgrade to Buy from Neutral. Shares of INTC are up 3.0% and are a major driver of the Philadelphia Semiconductor Index, which is up 1.3% and outperforming the broader market.

1:00 pm: [BRIEFING.COM] Everyone was waiting for the November employment report all week, and with the major averages all up at least 0.9%, it is pretty clear what the market thought of that report. It liked what it saw, because the data were solid enough to suggest the labor market is certainly improving but not strong enough necessarily to force the Fed's hand into tapering at this month's meeting.

That middle-line view was perhaps best reflected in the Treasury market, which moved higher after the employment details were released. The Treasury market has faded from its best levels and is now little changed across the curve, yet the resilience at the back end indicates there isn't any abject fear of a tapering in December.

Briefly, some of the more pertinent statistics from the report that got the market's juices flowing were as follows:

Nonfarm payrolls increased by 203,000 (Briefing.com consensus 188,000) and were revised up for September (to 175,000 from 163,000) and down slightly for October (to 200,000 from 204,000)
Nonfarm private payrolls increased by 196,000 (Briefing.com consensus 200,000)
The unemployment rate fell to 7.0% from 7.3%
The labor force participation rate went up to 63.0% from 62.8%
The employment-population ratio jumped to 58.6% from 58.3%
The number of civilians employed increased by 818,000 while the number unemployed decreased by 365,000
Average hourly earnings increased by 0.2% (Briefing.com consensus 0.2%) while aggregate earnings increased 0.6% (a good portent for consumer spending)
The average workweek edged up 0.1 to 34.5 hours (Briefing.com consensus 34.5) and factory overtime increased 0.1 to 3.5 hours

Simply put, the November employment report was encouraging from an economic standpoint. More people found jobs; the job gains were broad-based by industry; aggregate earnings increased a solid 0.6%; and the unemployment rate went down on account of more people being employed than it did on account of a drop in the labor force participation rate.

The major indices surged out of the gate, scoring the bulk of today's gains in the first 30 minutes of trading. The pop in the Nasdaq turned it positive for the week. The S&P 500, meanwhile, is also on the cusp of turning positive for the week, which is remarkable given many forlorn narratives yesterday about how it lost ground in five consecutive sessions.

The strong gains have been underpinned by broad-based participation. Every sector in the S&P 500 is trading higher at this juncture, as is every Dow component.

The industrials (+1.5%) and materials (+1.4%) sectors are today's top-performing areas, yet the financial (+1.3%) and consumer staples (+1.2%) sectors are holding some influential sway of their own over the proceedings given their heavy weighting.

One of the few pockets of weakness can be found in the retail space today after some disappointing earnings guidance from the likes of American Eagle Outfitters (AEO 15.23, -1.17), Big Lots (BIG 32.21, -4.92), and Five Below (FIVE 46.60, -1.15). Separately, the CBOE Volatility Index (VIX 13.71, -1.37) is taking it on the chin, having dropped 9.2% in the face of today's risk-on advance.

12:25 pm: [BRIEFING.COM] Sideways is the directional trade at the moment, which is just fine for anyone who is long the market. That's because the vast majority of today's gains were logged in the first 30 minutes of trading.

The question that remains is, will the market kick into higher gear in the afternoon session and drive the S&P 500 positive for a ninth straight week or will it fade on some understandable profit-taking activity. Recently, the market has shown a propensity to fade into the close, but right now it has a lot of underlying support.

The industrials (+1.3%), materials (+1.4%), financial (+1.1%), consumer staples (+1.1%), and health care (+1.0%) sectors top the sector performance list. The biggest laggards (relatively speaking) are the utilities (+0.5%) and telecom services (+0.5%) sectors with the market adopting more of a risk-on stance today.

11:55 am: [BRIEFING.COM] No real buckling in the major indices. They continue to trade near their highs for the session, which were established on the moonshot shortly after the start of trading.

If one needs any indication of the broad-based nature of today's rally, look no further than the Dow Jones Industrial Average, which features gains for all 30 components.

The best-performing Dow component today is Boeing (BA 135.61, +2.88), which, according to a St. Louis Post-Dispatch report, is reportedly planning to invest $10 bln to build a new plant for its 777X jetliner. Separately, Pfizer (PFE 31.45, +0.20) has the smallest price gain of all Dow components today.

11:25 am: [BRIEFING.COM] Various pundits have suggested today that the November employment report increases the odds of the Fed making a tapering announcement in December or January. The early action suggests either the market isn't buying the notion of a December tapering or that it isn't fearful of a December tapering.

To wit, stocks have rallied sharply, Treasury prices have increased as stock prices have increased, gold prices (+$2.60 at $1234.50/oz.) are up modestly, and the US Dollar Index has surrendered its post-report gains and is now flat for the day. The CBOE Volatility Index (VIX 14.01, -1.07), meanwhile, is getting clipped pretty good.

The 10-yr note (+8/32 at 2.846%) is at its best levels of the day as the major indices continue to hold near their best levels.

11:00 am: [BRIEFING.COM] The major indices have dipped from their best levels of the morning but still hold solid gains. Not surprisingly, the Advance-Decline line at the NYSE and Nasdaq skews decidedly in favor of advancing issues. It is nearly a 3-to-1 margin at the NYSE and roughly a 2-to-1 margin at the Nasdaq.

One stock -- and one of the most notable -- that is not among the advancers is Apple (AAPL 563.10, -4.80). There isn't any specific news behind the decline. It is worth noting, however, that Apple surged 9.3% over the previous eight sessions, so today's weakness is probably a case of profit-taking from a short-term overbought condition.

Some other outcasts can be found in the retail group, which is underperforming today. Names like American Eagle Outfitters (AEO 14.90, -1.50), Big Lots (BIG 32.12, -5.01), and Five Below (FIVE 46.05, -1.70) are under pressure after issuing disappointing guidance for the fourth quarter. J.C. Penney (JCP 8.26, -0.59), meanwhile, is backsliding on the revelation in its 10Q filing that the SEC requested information regarding the company's liquidity, cash position, and debt and equity financing.

10:30 am: [BRIEFING.COM] The commodities space has been very choppy this morning following strong economic data. Payroll and Michigan Sentiment data topped expectations and the unemployment rate dropped to 7%.

Feb gold and Mar silver initially dropped to their respective session lows of $1210.10 and $19.17 in early morning pit trade but have since reversed into positive territory. Gold is now 0.1% higher at $1232.90, while silver is up 0.1% at $19.58.

Jan crude oil has see-sawed between positive and negative territory this morning. It touched a session high of $97.99 and is now posting a 0.2% gain at $97.54.

Jan natural gas climbed to a session high of $4.20 in recent action and is now trading at $4.18, or 1.1% higher.

10:00 am: [BRIEFING.COM] The major indices continue to run, no doubt helped by some short-covering activity. It hasn't hurt either that the preliminary reading for the December University of Michigan Consumer Sentiment survey showed a sharp jump to 82.5 (Briefing.com consensus 75.1) from 75.1 in November. That is the best reading since July 2013.

A drop in gas prices, the continued rise in stock and home prices, and encouraging labor market trends have been positive influence for the consumer post-government shutdown (and re-opening).

Yesterday, relative strength was couched in terms of which sectors were down the least. Today, with every sector trading higher, relative weakness is being couched in terms of which sectors are up the least. The winners in that regard are telecom services (+0.5%), energy (+0.6%), consumer discretionary (+0.7%), and technology (+0.7%).

9:40 am: [BRIEFING.COM] As expected, the major indices have gotten off to a rollicking start. The Nasdaq for its part has wiped out all of its losses for the week and the S&P 500 isn't too far away from doing the same.

The catalyst for the advance is embedded in the encouraging employment report, which revealed positive trends for employment and earnings but wasn't so strong that it would necessarily convince the Fed to make a tapering announcement at its December meeting.

Every sector is participating in the advance, which has been paced by the financial (+1.1%) and industrials (+1.0%) sectors.

9:18 am: [BRIEFING.COM] S&P futures vs fair value: +18.30. Nasdaq futures vs fair value: +31.30. The details of the November employment report are out for the world to see, and so far it looks like the market is encouraged by what it saw. The S&P futures soared in the wake of the release. They are currently 1.0% above fair value, suggesting just about all of the losses over the last five sessions will be made up at the start of trading.

Strikingly, the expected rally in the stock market has not broadsided the Treasury market. On the contrary, the Treasury market also traded higher after the employment report was released. The 10-yr note is up two ticks and its yield sits at 2.868%. Gold prices have also picked up a bit and are now +0.7% at $1239.90/oz.

The positive correlation of those assets at this point would lead one to think the general impression of the employment report is that it was good, but not so good as to necessarily force the Fed's hand into tapering at its December meeting. That perspective could change yet, but it's a feel-good response so far.

9:01 am: [BRIEFING.COM] S&P futures vs fair value: +17.00. Nasdaq futures vs fair value: +29.80. Markets across Asia saw a mixed session as a cautious trade persisted ahead of today's U.S. nonfarm payroll report. Japan's Nikkei (+0.8%) led the region higher as a weaker yen provided support. Chinese markets were mixed as Hong Kong's Hang Seng (+0.1%) eked out a small gain and the Shanghai Composite (-0.4%) posted a modest loss. After markets close Japanese Prime Minister Shinzo Abe called for a summit to ease tensions with China. Data from the region was light, limited to a narrower than expected Malaysian trade surplus (MYR8.23 bln actual v. MYR9.5bln expected).

In Europe, the major averages are mostly higher with trade nearing session highs following the U.S. jobs report. Germany's DAX (+0.6%) outperforms despite factory orders (-2.2% MoM actual v. -0.4% MoM expected) falling short of estimates. Meanwhile, Spain's IBEX (-0.7%) is a notable laggard. Peripheral yields are lower with both the Italian and Spanish 10y down five basis points at 4.200%.

8:34 am: [BRIEFING.COM] S&P futures vs fair value: +5.80. Nasdaq futures vs fair value: +10.80. November nonfarm payrolls came in at 203,000 versus the 188,000 expected by the Briefing.com consensus. Nonfarm private payrolls added 196,000 against the 200,000 expected by the consensus. The unemployment rate ticked down to 7.0% while the consensus called for a downtick to 7.2%.

Hourly earnings increased 0.2% while the consensus expected an increase of 0.2%. The average workweek was reported at 34.5 against the 34.5 expected by the consensus.

October personal income declined 0.1%, below the increase of 0.3% expected by the Briefing.com consensus. Meanwhile, personal spending rose 0.3% while the consensus expected an uptick of 0.3%.

Lastly, core PCE prices ticked up 0.1% (consensus +0.1%).

8:07 am: [BRIEFING.COM] S&P futures vs fair value: +7.30. Nasdaq futures vs fair value: +13.50. U.S. equity futures are exhibiting a bullish bias ahead of the November employment report at 08:30 a.m. ET. The S&P futures are currently trading 0.4% above fair value, positioning the cash market for a noticeably higher start. Given the market-moving potential of the employment report, however, the current indication is not one that can be taken fully for granted at this time.

Reviewing overnight developments:

Asian markets ended mixed. Japan's Nikkei +0.8%, Hong Kong's Hang Seng +0.1%, China's Shanghai Composite -0.4%.
Economic data was limited:
Japan's Leading Index rose to 109.9 from 109.2 (109.9 forecast).
Australia's AIG Construction Index increased to 55.2 from 54.4.
In news
CNBC.com reports that Australia and South Korea signed a free-trade agreement that will eliminate tariffs of up to 300% on Australian exports.

Major European indices are all moving higher at this juncture following recent losses. Germany's DAX +0.5%, France's CAC 40 +0.1%, Great Britain's FTSE 100 +0.4%.
Investors received just a handful of economic data points:
Germany's Factory Orders decreased 2.2% month-over-month (-0.6% forecast, 3.1% prior).
Great Britain's Inflation Expectations came in at 3.6% (3.2% previous).
Great Britain's Halifax House Price Index increased 1.1% month-over-month (0.6% forecast, 1.3% prior), marking the 10th straight increase
France's government budget deficit widened to EUR 86.1 billion from EUR 80.8 billion while the trade deficit decreased to EUR 4.7 billion from EUR 5.6 billion (EUR 4.5 billion forecast).
Swiss CPI was flat month-over-month (-0.2% consensus, -0.1% last) while the year-over-year reading increased 0.1% (-0.1% expected, -0.3% prior).
Looking at news:
The Bundesbank raised its 2013 growth forecast for the German economy to 0.5% from 0.3% and bumped up its 2014 growth forecast to 1.7% from 1.5%

In U.S. corporate news:

FedEx (FDX 138.22): Company said it will increase shipping rates for FedEx Ground and FedEx Home Delivery by an average of 4.9% effective Jan. 6, 2014.
Five Below (FIVE 43.00, -4.75): Down 10% after guiding fourth quarter and FY14 EPS below consensus estimates
J.C. Penney (JCP 8.59, -0.26): Down 2.9% after disclosing in 10-Q filing that SEC requested information regarding company's liquidity, cash position, and debt and equity financing
Sears Holding (SHLD 49.98): Filed registration statement for spin-off of Lands' End business
Intel (INTC 24.65, +0.39): Up 1.8% after Citigroup upgraded to Buy from Neutral
American Eagle Outfitters (AEO 15.05, -1.35): Down 8.2% after guiding fourth quarter EPS below consensus estimate

November Nonfarm Payrolls and October Personal Income, Personal Spending, and Core PCE Prices will all be reported at 8:30 ET while the preliminary reading of the Michigan Consumer Sentiment for December will be released at 9:55 ET. The day's data will be topped off with the October Consumer Credit report, which is set to cross the wires at 15:00 ET.

7:30 am: [BRIEFING.COM] S&P futures vs fair value: +8.50. Nasdaq futures vs fair value: +15.30.

6:26 am: [BRIEFING.COM] S&P futures vs fair value: +6.50. Nasdaq futures vs fair value: +12.50.

6:26 am: [BRIEFING.COM] Nikkei...15299.86...+122.40...+0.80%. Hang Seng...23743.10...+30.50...+0.10%.

6:26 am: [BRIEFING.COM] FTSE...6521.50...+23.20...+0.40%. DAX...9129.50...+46.10...+0.50%.

Image Weekly Wrap from Briefing.com

Like Maxwell Smart used to say, "Missed it by that much." Less than a point separated the S&P 500 from its ninth straight winning week, but what a finish to the week it was. Sparked by an encouraging employment report for November, the S&P 500 jumped 20 points, or 1.1%, on Friday.

The week in review pretty much begins and ends with Friday since the market was preoccupied all week with the question of whether the November employment report would prompt the Fed to make a tapering decision at its December meeting. The answer to that question was basically yes, no, and maybe.

The report, which featured a 203,000 increase in nonfarm payrolls and a drop in the unemployment rate to 7.0% from 7.3% that was not driven by a decline in the labor force participation rate, was solid enough to convince participants that the labor market is improving but not strong enough necessarily to force the Fed's hand into tapering this month.

Whatever unfolds, the overriding message of the market on Friday was either that it didn't believe there would be a tapering this month or that it doesn't fear a tapering this month (or next month). Both the 10-yr note and the stock market pushed higher on Friday while gold prices and the US Dollar Index were little changed.

They were moves that stood in contrast to the tapering angst that existed earlier in the week after the release of the better-than-expected ISM Index, higher-than-expected auto sales, a 25% increase in new home sales for October, lower-than-expected initial claims, and an upwardly revised 3.6% GDP growth rate for the third quarter (more on that in a bit).

Every sector finished higher on Friday and so did every Dow component. For the week, the best-performing sectors were the utilities (+0.8%), technology (+0.7%), consumer staples (+0.1%), and energy (+0.04%) sectors, so a bit of a cyclical and counter-cyclical mix, which probably reflected some hedging with respect to the tapering idea and the thinking that the market is due for a pullback of some kind after its extraordinary rally.

Still, it was clear that money wasn't in a hurry to leave the stock market this week. That may have been owed to the thinking that another buy-the-dip run would be seen -- and sure enough that ended up being the case.

Now, in terms of the GDP report, it wasn't as robust as it appeared to be at first blush. The change in inventories accounted for 1.68 percentage points of the change in GDP; moreover, personal consumption expenditures were up just 1.4% (lowest since Q4 2009) while real final sales, which exclude the change in inventories, were revised down to 1.9% from 2.0% in the first estimate.

It is almost certain that there will be some inventory payback in the fourth quarter that will act as a big drag on fourth quarter GDP. Briefing.com's current forecast calls for growth of just 0.8%.

The Fed will be cognizant of that inventory drag (New York Fed President Dudley spoke about it in a speech a few weeks ago), which is one reason why there is still room to think it will hold off on a tapering decision for the time being. Another reason embedded in the November employment report is the fact that the number of people unemployed for 27 weeks or more accounted for 37.3% of the unemployed, up from 36.1% in October, demonstrating the ongoing difficulty of finding a new job after being out of work for so long.

Emergency unemployment benefits are due to expire January 1 if Congress doesn't strike an agreement to extend them. On a related note, there were reports this week that negotiators are close to striking a budget agreement that will prevent another government shutdown, but that emergency unemployment benefits are creating a sticking point in those talks.

The budget negotiations promise to be a focal point in the week ahead along with the Retail Sales report for November and Q3 GDP data for Europe.

Special thanks to Bloomberg, CNNMoney, Reuters and Yahoo! Finance for their market summaries. gm

Best Regards,
M.A. Perry
Trader and Founder of WRB Analysis (wide range body/bar analysis)
Image@ http://twitter.com/wrbtrader Image@ http://stocktwits.com/wrbtrader

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