Employment data hunch pays off!

The big news of the day was the U.S. Non-farm payrolls data for November and they were a big surprise to investors with a  fall just 11,000 instead of the consensus forecast of a 125,000 drop. October’s decline was revised to 111,000 from the original estimate of a 190,000 decline. The unemployment rate fell to 10.0%  in November from 10.2%. After trading marginally positive for most of the day, all the U.S. indices reacted very strongly to the upside within seconds of the announcement, with the Dow Industrials rising in excess of 100 points and topping at around 150 pts higher.

As the day progressed, however, stocks pared those gains as commodity focused stocks began to drop as the Dollar strengthened significantly and In addition traders began to worry about the prospect of the Federal Reserve increasing interest rates as the economy recovers and hence increasing company debt servicing costs.  At close, the Dow ended up 22.75 points, or 0.22%, to 10388.90, after being in negative territory for a time.For the week, the Dow gained 79, or 0.77%, its fourth gain in five weeks.

Gold fell over 4% or $49 to $1169 and the dollar strengthened against all major currencies with higher U.S. interest rates driving speculators back into the green back and away from gold.

An exciting day of trading with short Euro/Dollar and long wall street positions being closed through the first few hours after the employment announcement. A short gold positon was well rewarded but was closed at -$18 so could have been a lot more profitable. Shorts on Amazon, Freeport and Caterpillar were also closed with good profits. Long wall street positions placed near the close.