Shovels sit Years ago there was much talk that there would be shovel ready jobs from the government in such areas as rebuilding the nation's roads, repairing its bridges and modernizing its schools. Although there have been some projects started in several states the Congress evidently could just not agree on doing this on a big scale and instead gave the power to the Federal Reserve to support the banks and Wall Street instead of supporting the people. A public jobs program would also be costly, but then, the country's infrastructure would have benefited, those workers would be paying taxes and the money they were paid would find its way into all other businesses, the auto industry and even the banks. The jobs report on Friday was much weaker than expected and the oversold US markets became even more oversold with the decline that day.  We had been expecting a rally and then a  decline to test the lows, but we did not think it would be only a one day rally and have such a quick decline. When the market gets this oversold one  expects a bit better rally and one may come this week. Some technical damage has been done as we will show in charts below as it could  mean a longer time for a final  uptrend to begin. Mike Burk reminds us that during the 4th year of the Presidential Cycle the DJIA has been up 58% of the time in June with an average loss of -0.1%. The best June for the DJIA 1938 (+21.0%), the worst 1930 (-17.5%). For the past 50 years or so all of the markets' gains in June have been made during the 1st week.

Our stockcharts public page have been extremely useful in pointing out the market directional changes and even just using the market ETF's and Mechanical charts shown there.

Before we get to today's charts some  entertainment from the past.

Douglas James "Doug" Kershaw (born January 24, 1936) is an American fiddle player, singer and songwriter from Louisiana. Active since 1949, Kershaw has recorded fifteen albums. If you have traveled to Louisiana  you certainly have heard Cajun music and if you were in New Orleans, you probably spent time in a bar or restaurant that played Cajun or zydeco music. One of the most well-known musicians playing Cajun music, Doug was especially popular in the  1970s and his song "Louisiana Man" was broadcast back to earth by the crew of the Apollo 12 moon mission. This video is from the late 1970s on a PBS special named Fiddler's Three. If you were to walk into a club where he is performing this song, you can be assured that everyone is up on their feet.  A very energetic performer use well-known for shredding his bow strings. You will for sure  note the hairstyle and sideburns popular in that era. Here is Battle Of New Orleans.

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The economy added a net of just 69,000 new jobs in May, far lower than the 150,000 expected by most economists. Furthermore, the already week job creation numbers posted for April were revised down sharply to show a gain of just 77,000 positions, 38,000 fewer than the 115,000 initially reported.  At the same time, the unemployment rate ticked up to 8.2 percent in May from the 8.1 percent reported in April, a disappointing figure to economists who had predicted that the rate would hold level. Department of Labor officials said that an increase in the labor force, along with the slow rate of job creation, played a role in the slight increase in unemployment. The number of part-time jobs was up 757,000, which is far larger than the rise in the number of employed. Full-time employment actually dropped by 266,000. The broader measure of people who are unemployed or underemployed (part-time but wanting full-time work) is now back up to 14.8%. The Gallup Poll people, using a different survey basis, show an 18% underemployed rate. graphs -  RTTNews 

Personal income edged up by 0.2 percent in April following a 0.4 percent increase in March. Economists had expected income to increase by about 0.3 percent. Meanwhile, the Commerce Department said personal spending rose by 0.3 percent in April after climbing by 0.2 percent in March. The increase matched the expectations of economists.

The May 2012 ISM Manufacturing Survey PMI declined -1.3 percentage points to 53.5% and indicates U.S. Manufacturing grew at slower pace in May, yet new orders hit a high not seen since April 2011. Prices paid for raw materials absolutely plunged and is the lowest since December 2011. Survey comment responses were a mixed bag, but generally positive overall.

New claims for unemployment in the U.S. rose by more than expected for the last full week of May, according to figures released by the Labor Department. New unemployment claims came in at a seasonally adjusted level of 383,000 for the week ending May 26, up 10,000 from the previous week's revised level of 373,000. The initial unemployment claims level was higher than the predictions of most economists who had expected new claims to hold steady at the 370,000 level initially reported for the previous week. The four-week rolling average of new unemployment claims, a figure that eases some of the week-to-week volatility in the reports, showed a slight, 3,750 increase to 374,500 from the previous week's revised average of 370,750.

The index of pending home resales dropped 5.5 percent following a revised 3.8 percent gain the prior month, figures from the National Association of Realtors showed today in Washington. The median forecast of 42 economists surveyed called for no change in the measure.

ADP had different numbers than the official ones - as they said private sector employment rose by 133,000 jobs in May following a downwardly revised increase of 113,000 jobs in April. 

While the U.S. economy saw continued growth in the first quarter of 2012, the Commerce Department released a report showing that the pace of growth was slower than previously estimated. The report showed that GDP increased at an annual rate of 1.9 percent in the first quarter compared to the initial estimate of 2.2 percent growth. The downward revision to the pace of growth came in line with expectations.

The latest jobs report showed that nonfarm payrolls (jobs) increased by 69,000 in May. Today's chart provides some insight into the current US job market by comparing the percentage change in total nonfarm payrolls (blue line) since the declared end of the Great Recession to the performance of the private sector job market (gold line) and government sector job market (red line) during the same period. As today's chart illustrates, the overall job market (blue line) continues to trend higher albeit at a pace that has slowed over the past several months. Today's chart also illustrates that the government job market has been trending significantly lower since the first half of 2009 (with the exception of temporary census hiring in mid-2010). This decline is due to federal, state and local governments attempting to realign their budgets following an unexpected decline in revenues as a result of the historic plunge in housing prices (i.e. property taxes, capital gains, etc.) and nonfarm payrolls (i.e. income taxes, payroll taxes, etc.).

This past week's  sectors.

This past week's indices  - 

This is how the indices have performed since December 28 and we see the tech heavy NASDAQ has been the clear winner in 2012. 

On the monthly chart we see of the stock indeces only the NASDAQ sits at the center Bollinger band while the others have dropped below and showing no meaningful support close by in this time frame. Oil is only five dollars above its lower Bollinger band, which is also near the former 50% retracement level and prior support. Gold has bounced up from its center band, which is bullish, though it would need to get back above that broken trendline near 1700 to confirm a reversal.

The 60 min. multi-index chart shows the rally high at the start of the week took the prices just a bit over the top Bollinger band with the small bounce on Thursday at the lower bands. On Friday the bands were just pushed down down down. Do note that the lower our RSI which is based on the Dow has become oversold at 27 and when this happened near the 20th of the month, we got  bounces on all indices. 

On the weekly chart last week's white candle was at the 50 week EMA  and there was the possibility of a rally, though the volume was light. Instead, it broke the 50 week and horizontal for a drop under the Bollinger band. You see some possible support from  mid-December near 11,800. 

On this longer term daily chart you see the break was also under the 38.2% retracement level with the 50% offering some support around 11,877. 

This is a closer view so Fibonacci levels are a bit different. But here we also show a possible measured move with the purple lines. If this first leg down is repeated in the one started this week, they could drop close to the 61.8% retrace closer to 11,500. If it did so probably could not do so directly as the RSI is already becoming quite oversold. 

This Dow renko chart from Friday shows that there were a couple of attempts to rally but in the end the close was at the low of the day. 

This is a pretty clear Dow futures chart we posted on Friday. It shows Fibonacci retracement levels from the  October low and also from the late November low. The 50% retracement of one is only slightly higher than the the other. Often if you get an overlap it is a more significant level and you see the close on Friday was right at that 38.2% retracement from the last October low. 

The transportation average dropped 3% this week, but held  the lows from the previous two. That in relation to the rest of the market is quite bullish. 

The utility average closed at the low for the month. It's remains above, by one point, the 50 day EMA. 

The moving average of the number of new highs on the NASDAQ naturally continues lower but  remains above the former bounce points from December  

In this longer-term view we first note in gray that the NASDAQ is close to some horizontal support, which was formerly resistance. The number of new highs line is also at former support. 

Our  NASDAQ summation index remains on a sell signal, though note that that small bounce at the beginning of the week brought the two lines the close together so would not take too long on a rally for them to move back to a buy. 

The NASDAQ 60 min. chart had broken above this ascending parallel channel and closed right back on top of it on Friday with this short term our RSI is again under 30.

A  longer view of the NASDAQ 100, as it broke below the 200 day EMA. You see horizontal levels of support below followed by the top of the triangle and Fibonacci level.

The NASDAQ 100 tried to hold above that former bounce point, but was unsuccessful on Friday. There are some horizontal support levels and below those the 50% retracement and eventually the trendline shown below. 

The NASDAQ 100 ETF 60 min. chart has remained on the cross over sell since the first week of the month and has RSI again slipping under 30. 

May saw the small whipsaw from the mechanical renko chart, as we had the short term rally, but it is again on a sell. 

The volatility index ran up 10% on Friday, closing over 26.  

The semiconductor on Monday ran up to test the broken 200 week EMA and  typical  short area but ended the week down 5%. 

The general market was weak, but Apple had its RSI move back over 30 when it jumped inside the ascending parallel channel and  rallied up about 50 points to the 127.2% Fibonacci projection and then a pullback on Friday. 

 A 60 min. chart showing the crossover occurring a bit later on after the Williams and RSI moved over their own lines.  

Facebook had some short term buy signal this week. It had dropped below the 161.8% projection and then bounced back inside the parallel channel. As RSI went over 30 for the second time for a low risk entry with a stop just under. The negative market on Friday was too much weight so although it pulled back, it remains above the  parallel channel  line.  

The top portion is the New York stock exchange new highs minus new lows and although it closed lower than we have seen since last October, it did not move aggressively lower. The lower chart is the S&P 500. 

And in this chart we have the NYSE on top having broken the trendline and horizontal line and in the lower chart the moving averages of highs minus new lows. Not nearly as low as it was last October. 

13% of the stocks on the NYSE are now trading over their 50 day moving average and good points for bounces in the past have  been at readings in between 5% and 10%. 

This indicator using a longer term Williams is not quick to respond so it only shifted to a short side this week. We did see a whipsaw in this last November, and perhaps it will be the case again this time though it is a warning as it shows much negativity when it goes into this level. We see RSI on the bottom and we usually see at least a bounce not long after it reaches levels such as these. 

Our bullish percent indicator has been short since April and went long for one day on Monday, as it reached 53.80 but went back to sell right away. 

We have not shown this chart is a long time since the beginning of the year as the S&P 500 candles crossed over the average true range line in January. On Friday they crossed back over which is another cautious sign. Although longer-term the charts suggest we are still in a longer term bull market, charts such like this warn they could become even more negative, with a longer-lasting decline. Typically when the average true range is rising the market is falling. 

The daily S&P 500 broke the 50% Fibonacci level on Friday on higher volume with the next Fibonacci level at 1259. 

On a longer-term scale we see  a 50% retrace at a lower level of 1246. Note that the trendline was broken and moving averages crossed over at the start of May. 

The S&P 500 60 min. chart in a parallel descending channel. 

A mechanical S&P 500 switched back to a sell. 

The S&P 500 futures chart showing retracement levels from the November low and projection levels from a shorter time frame chart we show each day live on our charts page during market hours. This shows that if that cash 1260 level is breached, there may be some support here in the futures 1256. The next level down would be 1244, which is the 61% retracement level 

Here a shorter time frame showing the close under the 127.2% projection. For short term trading there was a sell signal from RSI near the 1330 level and then a break above the trendline near 1307. Both of them providing good profits Charts like these are live on our charts page open during regular market hours (though this week closed Wednesday through Friday). 

The pro-shares ultra short chart is live on our stockcharts pages and it became a buy on May 3 and a crossovers sell May 25 and with long again on Thursday and it then broke above its  line. 

The Russell 2000 daily tested the broken 50 week. EMA and popular shortening spot then dropped this week to new lows, which may have it drop to the 200 day EMA and the lower trendline. 

This view shows a possible bounce short term if it holds this Fibonacci level. 

On the 60 min. chart we see the price is lower while RSI is not so generally considered positive convergence, but it may just be the slowness of the RSI. 

Also on our stockcharts page. Is this 15 min as it went to sell on this crossover and then of course the break below the triangle support. 

The triple ETF long for the Russell 2000 closed just above this 61.8% retracement level  from the October lows. 

The banking index long term chart shows the lower  triangle trendline closer to 40. 

And this is a closer view also showing some Fibonacci retracement levels. 

Here a weekly view as it closed eight cents below the January bounce point 

The 30 year treasury bond prices  rise as rates lower more. There is talk that in some countries there are certain bonds, which now have a negative rate of return and although that is possible in the USA as well, it is not likely.

The retail sector chart in itself may not appear bullish but compared to the rest of the market, in holding above its recent lows is quite positive. So far. 

This may change on Monday as a reaction to US markets, but the London Financial Times index held its support and 61.8% retracement last week. 

With gold rising and miners doing better the Canadian Venture exchange only consolidated this  week. 

There is concern about the slowdown in China on this week. Not so much as it actually rallied 1.7% 

Commodities in general continued lower with our ETF dropping 6% nearing levels of last October lows, noting that all indicators are now oversold. 

Crude oil lost over 8%  and dropped below the 200 week EMA a as Williams now touches the 80 line and RSI is below 30, so at least a bounce will be coming. 

Unless it were to recover and go inside this triangle very soon, this break of the 200 week EMA  and trendline could be the start of a longer-term decline. Rallies back to test the  trend could  be shorted with stop over.

Oil  made a big move from $10 in 1999. Of coarse there has been more demand but one would think that more demand would lower prices. Wal-Mart says that anyway. This just shows that when the US goes back into recession oil does have the possibility of testing the 2009 lows. At the dotted line. Of coarse there are much higher support levels to deal with first. Low oil prices hurt the Dow and some extent the S&P 500 because of the corporations that are on those indexes. At the same time it helps the US consumer because the prices are lower. So this can create more buys of other things and help the economy. 

The July crude oil futures chart that dropped below the 78.6% retracement level and may test the October lows near 76 dollars. RSI at the moment is oversold and 22. 

Natural gas continuing its correction after its big run dropped back below the 20 day moving average this week having been rejected about at the  RSI 50 line. 

 ETF for natural gas had run up 70% to its 50% Fibonacci retracement level toward the $74.50. RSI drop under 70 the near the high. 

This one at Friday's close held the 78.6% retracement level. 

A big move up in gold on Friday rising 3.8% to close over the down trend line and slightly above the 50 day EMA. RSI  signaled an up turn buy in  May, as did stochastics. 

Gold futures showing the several short term our RSI signals and the break from the triangle on Friday. 

The gold shares closed back just under this parallel channel line. So needs to get back inside to confirm the reversal. 

We have four stocks on the watchlist as a couple of weeks ago we noted that it appeared that gold stocks would  begin to move and all of our stocks have done very well so far. This one is up $10 from the original buy and up 10% alone with high volume on Friday. It is now short term overbought but know if emotions  remain high it could go one more day before pulling back short term. 

When we look at the gold miners versus gold metal the miners led the way and  on Friday gold metal made a big move up as well. Deflation may be on the way before inflation and that is a bit longer-term, but at some point a deflationary time  will probably hurt gold prices. 

The GDX miners  continued this move bouncing precisely at support as RSI and  Williams continue higher. 

Here is a closer view showing the trend line break and now the movement above the 50 day EMA on  very high volume. 

The 60 min. version  andthe parallel channel. 

Now in the fifth or sixth year of using the mechanical trading of the  gold miners ETF so we trusteveryone uses it. In has been an excellent move from the buy signal in mid-may. 

The silver futures for July bounced slightly as RSI went over 30 in the last couple of weeks, but is still in the lower part of its consolidation. 

 Silver could bounce anywhere, but it would be technically much nicer if it tested, successfully so, the 200 week EMA at $25.52.

The silver ETF broke above and triangle and then came down to test by the close on Friday. 

A small bounce was not enough for the mechanical chart to shift to a buy.  

If silver does move then the silver miners soon may as well and SLW would be one to watch if it moves above the down trend line and then above the 50 day EMA at $28.45.  

Copper last week tried to hold the 200 week EMA a and this week dropped below losing 3.6%. 

Palladium, however rallied 4% this week on  increased volume. 

The euro futures dropped below this shorter-term 127.2% Fibonacci projection and  closed back over it on Friday. The 161.8%, as shown if it continues lower, but do note that RSI in this time frame is very oversold at 19 so a bounce may follow, which would likely mean a decline in the dollar in the rise in the US markets. 

May was a big month for the dollar and here we see only Friday. Flat line for June on this monthly chart. 

And here it is on daily chart. 

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Political content - skip if not interested. Not everyone in Congress is bent on passing laws that are in stark conflict to the United States Constitution but many sure vote to do so each week. Ron Paul is one of the few who stands up for the citizens to try and fight the abuse of power and the stripping away of constitutional freedoms and issues. In this past week's radio address, he talks of his opposition to even more government control of its citizens. There are no other presidential candidates who seem to care about constitutional liberties.  Ron Paul Ron Paul's Texas Straight Talk (5/28/12): Capital Controls Have No Place in a Free Society Ron Paul pledge page Be a model of peace and economic reform.   The only logical and honest choice for 2012 to help fix the broken governmental system and stop the reckless wars that all the other candidates want to continue.

This week's economic calendar for the USA.