PEACHTREE CITY, Ga., May 7, 2009 (GLOBE NEWSWIRE) -- Employment numbers are the best predictor of an economic recovery. The latest employment figures show that the economy is still weak. In spite of the current market rally, a real recovery is months away, says trading expert Wayne McDonell.
"Employment is the most critical factor in a recovery -- employment drives both spending and lending," says Wayne McDonell, a registered commodities trading advisor and chief market strategist of FX Bootcamp (www.fxbootcamp.com), a live forex training organization, and author of "The FX Bootcamp Guide to Strategic and Tactical Forex Trading" (Wiley Trading, September 2008).
"In the economic downturns over the past 40 years, there has been no recovery until unemployment bottoms out," Mr. McDonnell says.
But the newest figures show continued job loss:
* The ISM (Institute for Supply Management) Non-Manufacturing Report on Business for April, released May 5, had an index number of 43.7, compared to 40.8 in March. "That shows continuing job contraction in the service sector, but the rate of contraction is slowing, which suggests the beginning of some improvement." * The Non Farm Payroll report for April, due May 8, will reflect 522,000 jobs lost, Mr. McDonell predicts. "That's a slight improvement over previous months, but it's still a high figure. It's hard to talk about a recovery when you're shedding an additional 522,000 jobs."
According to Mr. McDonell, continued high unemployment numbers will keep mutual funds and other long-term investors out of the market. Until they return, short-term traders will dominate, and the market will be volatile. There will be a pullback from the current rally, followed by a series of rallies and pullbacks as traders take profit or go short, Mr. McDonell says.
"If employment numbers begin to improve, more long-term money will enter the market, and each successive pullback will be smaller because the long-term money will stay in. Finally, the long-term money will dominate, and the real rally will start."
Wayne McDonell is available for interviews. For more information, or to schedule an interview, please contact Itay Engelman of Sommerfield Communications at (212) 255-8386 or itay@sommerfield.com.
About Wayne McDonell
Wayne McDonell is the Chief Trading Strategist of FX Bootcamp, a live forex training organization, which has an audience comprised of members from over 50 countries. He is also the author of "The FX Bootcamp Guide to Strategic and Tactical Forex Trading" (Wiley Trading, September 2008), a top seller in the Foreign Exchange category. Mr. McDonell is a regular speaker at major investing conferences, including the upcoming International Traders Expo in Los Angeles. He provides his weekly trading outlook on FOREX Television and his training videos are syndicated around the world on outlets including FXstreet.com, MoneyShow, DailyFX, Yahoo! Finance and others. As a professional forex trader, Mr. McDonell is a National Futures Association member and a registered Commodities Trading Advisor.