T3’s Market Wrap: Bulls Fight On Ahead of Bitcoin Bombs

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Stock traded up today on a ‘good enough' jobs report, ahead of what could be the next Bitcoin bomb this weekeend.

The November nonfarm payrolls report was released this morning.

The economy added 228,000 jobs, surpassing Wall Street's 200,000 consensus forecast. Private payrolls were up 221,000, also beating estimates.

The unemployment rate was 4.1%, in-line with expectations.

But the real story was the miss in Average Hourly Earnings. Wages rose by just +0.2%, missing the +0.3% consensus.

Wall Street has been worried about a lack of inflation and this doesn't help the cause.

However, gold actually fell, and US Treasury yield rose slightly. So maybe for now, traders are okay with the little wage growth we have, even if it is below expectations.

The University of Michigan sentiment survey was 84.6 in December, missing the 90.6 consensus.

Consumer sentiment/confidence readings have been pretty strong as of late, so this miss is a surprise.

The S&P 500 traded up 0.4%, with the Nasdaq and the Russell 2000 also posting modest gains.

Biotech bounced hard again today, with the Nasdaq Biotech ETF (IBB) pushing up 2%.

As you can see in the chart, this is its second day back above the 200-day moving average.:

This, along with today's bounce in China, is a big positive for the bulls.

There have been plenty of cracks in the momentum trade's armor — like the ups and owns in tech and small caps — so this is some much needed stabilization.

This morning, T3 Live Chief Strategic Officer Scott Redler issued this analysis of the S&P:

SPX gave us a new low to trade against at 2624. That’s about 40 handles off Monday’shighs. 

If the 2640 area gets taken out with authority, that could mean Santa Claus is coming to town with gifts for traders. 

The S&P didn't move with authority today. Volatility was next-to-nothing today, and there was almost no movement in the index.

However, basing above Scott's 2640's outline support level could mean that once again, the bulls stepped up to stave off temporary weakness with a good old-fashioned ‘buy the dip.'

On Sunday at 6 p.m. ET, the CBOE's Bitcoin futures will start trading.

There could be some serious fireworks.

The Bitcoin market is already the wild west, with pricing discrepancies across different platforms, plus some outages due to a surge in account openings.

No one knows how the introduction of futures could impact the trading of Bitcoin itself.

For example, quants could start trading the futures vs. Bitcoin itself, and one or both could get pushed around artificially.

And if there's a sudden collapse or surge in Bitcoin, odds are lots of margin calls will go out, generating massive forced buying or selling as the case may be.

The CME's Bitcoin futures will be released next week, and I'm sure that will add to the fun.

Interestingly, we just conducted a survey about Bitcoin, and if anything, our respondents seemed very cautious towards Bitcoin.

In giving their thoughts on Bitcoin, a number of survey respondents used variants of the word ‘tulip,' in reference to Dutch Tulip mania in 1636 – 1637.
When creating this survey, I assumed we’d attract more Bitcoin bulls, but we got the opposite.

 

 

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