Welcome to the weekend, friends and fellow traders. Well, you probably don't need me to tell you the jobs report for July was merely mediocre, and yet, the consensus was that it was still good enough to let the Federal Reserve go ahead and raise interest rates as early as September. I honestly don't understand that mentality, for a couple of reasons. One of them is the fact that, though an unemployment rate of 5.3% is historically low-ish, we all know the effective unemployment rate (people who aren't collecting unemployment, but would like a job and don't have one) is higher than average. Plus, a mere 215,000 new jobs just isn't enough to shove the economy into high gear. The second reason I personally can't see the easy justification of a rate hike next month is something Boll Gross said this morning... that the global economy is teetering on deflation. Thing is, Gross didn't see that as a reason to hold off on a rate hike. He thought it was a reason for higher interest rates sooner than later. I see where he's coming from. His theory is, the downside of low interest rates is finally wearing thin on American companies and consumers, and higher interest rates would serve to boost prices - especially commodity prices - by jump-starting inflation. And truth be told, in most situations raising interest rates could do just that. I'm not sure a rate hike would rekindle inflation this time around, however. From where I sit, investors have gotten so used to uber-low rates and developed so much confidence that any rate hike is bad, that any rise in interest rates will be met with hysteria (even if that hysteria is unmerited). Just for the record though - and just for the sake of a balanced debate - John Monroe over at the Elite Opportunity agrees with Bill Gross that a rate increase in the near future may actually do the market some good. He wrote in today's EO newsletter: "All of the concerns regarding interest rates will come down to some extremely basic economic fundamentals. If the Fed ends up raising rates as economic data starts to strongly improve, I really don't think that will end up being bad for stocks. As a matter of strong opinion, I think it would actually provide a catalyst for stocks to move higher. Should the Fed be forced to raise rates in an economic downturn, which I would find highly unlikely, I think that would be pretty bad for stocks regardless of the Fed maintaining a low rate environment. This whole aggressive monetary stimulus environment has been going on way too long. It's literally time for the economy to step up or step down. It's time for the training wheels to come off and we really don't think further extending rate hikes is going to help stocks anymore. It's all going to come down to what has driven stocks throughout history, the economy and corporate growth. The bottom line is we're predicating the markets' next big move solely on economic improvement, or lack thereof, as well as corporate earnings, consumer spending and sentiment etc... We don't believe rates are going to end up being the long-term story anymore. Rising or falling rates should, however, be an indication of what's to come for the economy." It's a good point. Maybe we all need to worry a little less about picking apart every single word Janet Yellen says. Only time will really pick the winner of that debate though. In the meantime, the only thing we can do is gather ALL the information we can about what's going on. With that as the backdrop, let's go ahead and - as always - show you the entire employment picture. The DoL and the media only gave you a small part of the relevant data. Employment Is Just OK As was noted above, the U.S. economy added 215,000 new jobs in July, which was a step forward, but not enough to move the unemployment-rate needle from 5.3%. For the context you didn't get from the media's coverage of the news, however, here's the long-term chart of both. Job growth has been slowing the past few months, but is still around long-term averages. The chart below is the rest of the story. It shows you the number of people with jobs, the number of people officially without jobs, the number of people unofficially without jobs, and the official size of the labor force. In this context the employment situation is..... just ok. The total number of people who are working edged a little higher, from June's level of 148.74 million to 148.84 million, while the number of unemployed people fell from 8.3 million in June to 8.266 million last month. [No, those numbers don't jibe with the DoL's other payroll-growth numbers.] The chart also shows the labor force grew a bit, from 157.04 million to 157.11 million.... probably just enough to keep the unemployment rate at 5.3% rather than sliding to 5.2%. What concerns me most about this chart, however, is the slight uptick in the number of people who aren't being counted in the labor force but do want a job. It's still only at 6.135 million right now, up a bit from June's reading of 6.076 million. It makes me wonder though...are there a lot more people waiting in the wings who will want employment when they feel like it's something worth pursuing? If so, that could push the unemployment rate higher, forcing the Fed to rethink if the economy's really as strong as the current data implies it is. I still say the employment situation is more of an asset than a liability. I'm just not sure it's as rock-solid as investors and the Fed seems to act like it is. Behind the scenes, wage-growth has been downright anemic, underscoring the idea that the jobs market is tepid at best. It's Now or Never (or at least later) This is it. The bears now have the perfect opportunity to deliver the knockout punch. In fact, for a brief moment I thought they were going to do so today. When it was all said and done though, the bulls had just enough fight left in them to keep stocks afloat. It ain't over yet though. The chart of the S&P 500 below isn't tough to figure out. The sellers pulled the market below its 200-day moving average line (green) on Friday for a few moments, and even went as far as to test the lower 20-day Bollinger band at 2070. The Bollinger band passed the test, shoving the S&P 500 back above the 200-day line. It's possible this is all we needed to do to push the pendulum back in the other direction... in a bullish direction. It's equally possible, however, the bears just need to chip away at the floor for a little longer. If I trusted the market enough here to act on the hints it was dropping, I'd be inclined to lean bearishly even though we saw support today. But, you guys know as well as I do stocks have been little more than a coin toss of late. The reason I'm still leaning bearishly, though, is the way the weekly chart continues to show cracks. Take a look. To tell the truth, the weekly chart is the timeframe we need to be watching anyway. The daily chart has been so noisy and erratic lately that it's told us little about the bigger picture; it's only been of use to swing traders. For the folks who are in for the longer haul though - or even the intermediate-term haul - the weekly chart does a better job of telling us where we're going. And right now it says the market is hangin' by a thread. That comes as no real surprise heading into the weekend. My advice: Not that you have a choice in the matter right now anyway, but let's just sit tight through Tuesday or so and see if the bears want to take another shot at the 200-day moving average line. If you're looking to trade something in the meantime, Elite Opportunity members got a trading idea today that explicitly has nothing to do with the stock market (which is a brilliant move in itself). You can still poach John's idea by becoming an EO member right now. Here's how, or cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/