Top Takes From RealMoney

The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that RealMoney contributors posted today and how they played those ideas.

TheStreet.com brings you the news all day, and with RealMoney's "Columnist Conversation," you can see how the pros are playing it on a real-time basis. Here are the top five ideas played today. To see all that RealMoney offers, click here for a free trial.

1. Jobs Report: Was It Really That Bad?


By Jeff Bagley
2:10 p.m. EDT

Jim Cramer asks whether 40,000 to 60,000 jobs trumps everything good that has happened.

At the risk of rationalizing an economic data point, let me add that the job losses reported this morning included the layoff of 49,000 government workers that were temporarily hired to prepare for Census 2010. In addition, consider that the margin of error on the monthly employment report is about 100,000.

Furthermore, the household data showed little change in employment, albeit with a small uptick in the unemployment rate.

Out of all the economic data that is released, the jobs report probably has the most influence on market participants. I understand this and believe me I also understand that rationalizing it could end up being a very costly error.

I just believe that the report this morning, while bad, was not nearly as bad as today's market action would suggest.

No positions.

2. Mortgage Rates Fall


By Marc Chandler
2:01 p.m. EDT

The average 30-year fixed rate mortgage fell 10 basis points to 5.32%. Fed officials may find some comfort in this development, but it is unlikely to silence its critics. Some believe the Fed needs to buy more long-term assets, especially since it has taken steps that slow purchases and did not expand long-term asset purchases at the June meeting. With more than $100 billion left of the $300 billion commitment, the Fed does not have to make a decision about its future intentions at the August FOMC meeting given the current pace.

This demonstrates it is not targeting a particular rate. The dollar is in trouble either way. The relationship between the dollar and interest rates is not linear but cyclical. Interest rate differentials will continue to move in the U.S.'s favor and we expect that this will give the dollar better traction. It will, of course, require that the current relationship by which the dollar rallies on bad news to break down more convincingly.

No positions.

3. Seven Percent Fed Funds?


By Tom Graff
12:50 p.m. EDT

I saw that there was a trade in the fed funds market at 7% on June 30, but I had dismissed it as just an anomaly. But now some traders are talking about a bank being in trouble.

Bear in mind that the fed funds is a manipulated market, but isn't a controlled market. Thus, if someone were desperate enough for an overnight loan, the market would find a clearing rate.

It doesn't have to be a big bank. The Fed doesn't report size of fed funds transactions. Nor does it report who the lender or borrower was. Either way, its worth noting that through the discount window or TAF, banks should have access to capital at rates well below 1%. So it's extremely curious that any bank would agree to borrow at 7%. Or, for that matter, that another bank would demand 7% to lend.

No positions.

4. Morning Trade


By Bob Byrne
9:26 a.m. EDT

The bulls find themselves in a bit of a jam this morning, and if they are not able to build some momentum back above 907.50 they run the risk of being pushed back to the bottom of our range near 880. The bears need to focus on one thing today... closing this market under 907.50 by as much as possible.

Watch for early morning buyers anticipating a gap fill, but be aware that all trading under 907.50 favors the bears and a break of 904.50 adds further downside momentum.

The S&P E-mini is currently waffling around the 907.50 area, which happens to be strong support/resistance. A sustained trade under this area puts the bulls back on their heels and in danger of a further beating. The bulls need to man-up, push this market back above 907.50 and target moderate resistance at 909.50 and 913. All trading between 913 and moderate resistance at 917.50 will have a more neutral flavor as neither side will have much of an edge.

Unless the bulls come rushing in at the open the bears can continue to push this market lower with moderate support at 904.50 being their first target. It's going to get a bit tricky as we approach the 900 area -- We have several moderate/strong and strong levels relatively close together. Moderate/strong support comes in at 901, strong support at 896 and then another level of moderate/strong support at 891.50. This 10-point range will be better suited for quick scalping than anything else.

No positions.

5. Morning Prep


By Ken Wolff
9:00 a.m. EDTNormally on a gap-down day like today I would expect early buying. Our last gap-down day produced early buying, but with the news event this morning, I don't consider early buying predictable. We can do anything this morning in this type of trading environment.

Elan (ELN) is interesting after making a deal with Johnson & Johnson (JNJ) for its immunotherapy program. Look for early buying if it's going as high as $8.80 to $9.00.

No positions.


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This article was written by a staff member of RealMoney.com.

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