From time to time, we thought it might be interesting to share the real-time reactions of the professional traders working at Topstep. What follows is the transcript of our #band_of_traders Slack channel after the release of Friday's wild unemployment number.
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John D (John Doherty - Writer): Who saw this coming? Not me.
Dan (Dan Hodgman - Performance Coach): Mind blowing! I was ready to finally start accepting the short side.
John D: I wouldn't go that far, but I definitely thought covering longs last night was a good move.
Jack (Jack Pelzer - Content Manager): So what do we make of the actual number? Remember this is only meant to capture data from the beginning of the month when much of the country was still under total lockdown.
John D: It looks like a lot of the temporary layoffs are back to work. [Jim] Cramer says this number proves the stock market had it right the whole time.
Dan: I think we need to remember that the break in March was not an economic collapse, it was a public health crisis. The underlying economy was working just fine. Now, we're seeing the country open up and spending increase. The stock market knew once we opened back up we'd get right back to where we started.
Jack: Okay, so now it's time for me to play the heel - how is the market going to react when the stimulus party gets canceled? *Also, JD, we don't cite Jim Cramer around these parts.
John D: lol. It's hard not to tune in on unemployment Friday. Anyway, who says the stimulus is getting canceled?
Jack: By that I mean the middle-to-high end of what people were expecting. I presume less unemployment will mean less stimulus by and large.
John D: We're still a long way from 3.5% unemployment. It's going to take some time, and the Fed will continue to print money.
Dan: I would agree, the Fed is going to do whatever it takes to keep this up. It's amazing to see NQ make all-time highs right now, it's like we never had a worldwide pandemic.
John D: It is incredible. Weak shorts keep re-fueling the rally.
[Enter John Hoagland]
Hoag (John Hoagland - Performance Coach): NQ at all time highs.
Jack: This is what gives me pause, it's like there's no uncertainty at all being priced into these markets. This is what keeps me from being long with conviction. What keeps me from being short with any conviction—despite the pandemic, social unrest, high PE ratios—is Jerome Powell.
John D: Let's take a vote: who thinks the NQ can close out the week above 10K?
Hoag: I vote no.
[John Hoagland disappears into the night]
Jack: No. Today's Friday, right?
Dan: This week, no. Next week, yes.
NOTE: As of Monday at 9:52 AM CT, NQ sits at around 9,800. We will be sure to give Dan a prize if his prediction comes true. Now back to the conversation Friday morning...
John D: It's not that far off, and up 200+ points from yesterday's low. But yeah, probably see some late day profit taking.
Jack: I think this unemployment number demonstrates that our current economic indicators were not meant to capture the impact of something like a pandemic. There's a lot of weird statistical inferences being made in this number (Read up on the "birth-death ratio" if you want an example). Also, two of the most recent claims numbers were off because of missing commas or typos. So yeah, I'd be taking profit here especially going into the weekend. Then again, I was also taking profit at 3,000... and maybe a little lower too. I wish I could just be happy.
[Nick Dolby enters the conversation]
Mick (Mick Ieronimo - Topstep Risk Manager):
