Jobs Report & Are We Still In A Bull Market?

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Good news is bad news, bad news is good news or is it the other way around? I have no idea, nor does anyone else. Investors have been obsessing about today’s jobs report for over a week. Hoping it would clarify what the FED will do in December and how the stock market will react.

If you are still wondering, October jobs soared to 271K, smashing expectations. Unemployment rate is now at 5%. Bullish or bearish?

In reality, you don’t really need this data point. What the FED will do is as clear as night and day. It goes something like this…..

Can’t raise or won’t raise. Today’s economy or financial markets won’t be able to digest any rate increases at this juncture. Period. As talked about on this blog so many times before. Why The FED Will Not Raise Interest Rates If the FED members have even an ounce of intelligence, and I believe they do, they realize the same. Point being, they won’t raise in any meaningful way.
If the market declines, issue a “Dovish” statement. Bring it up. (Late September)
If the market recovers, issue a “Hawkish” statement. As they did last week. Remember, they don’t want things too overheated.
Rinse and repeat while praying the market and/or the US Economy won’t implode on their own.

Here is another troubling fact. ‘We’re still in a bull market’: Dennis Gartman

If you have been following Mr. Gartman lately, you are very well aware of his 100% accurate track record. In reverse that is. As soon as he turns bearish the market bounces and as soon as he covers and goes bullish the market tops.

Are we still in a bull market?

I believe that is a wrong question to ask. The right question should concentrate on where we are in the cyclical composition of the market.

That is, today’s bull cycle, off of 2009 lows, is way overextended by now. Valuations are crazy and most bears have been decimated. Most importantly, we are still in a secular 2000-2017 bear market. All such bear markets end with gut wrenching plunges at the end of their cycles. For instance, 1912-1914, 1946-1949 and 1981-1982. Will history repeat itself? We will find out soon enough.