US ADP Employment data

US ADP Employment, the precursor to the big Non Farm Payrolls and Unemployment Rate figures due on friday, came out higher. Not high enough to give a trigger for trading the spike, however as US news generally has been bad when there is a good number, there usually is some reaction. Remember the Employment subcomponent of the ISM Manufacturing was also good. Could there be a positive NFP? Certainly the Fed will know this number as they start there discussions. Here is the data:

*(US) OCT ADP EMPLOYMENT CHANGE: +43K V +20KE
- Prior revised higher from -39K to -2K

Components:
- Small businesses: +21K v -14K m/m (retouches May 2010 recent high)
- Medium businesses: +24K v -14K m/m
- Large businesses: -2K v -11K m/m
- Goods-producing sector: -34K v -45K m/m
- Service-providing sector: +77K v +6K m/m (retouches May 2010 high)

Really ideally a larger deviation from the average economist estimate or the expected number of 20k would have what would have produced a nice news spike trade. The number coming out at +43k was only a +23k deviation and not enough to trigger the Secret News Weapon software to auto-click into a news trade in forex or futures.

Still these smaller deviations can produce some pips, but there are risks involved and traders need to research the historical price data to understand the patterns they can expect after the news release. What a trader is looking for is an initial extended move and then a pullback withing the first few minutes to get in on theh direction of this initial spike. Anyhow in the chart is an example of using fibs to catch an afterspike scalp trade.


US ADP afterspike