Well, one of my predictions has nearly been tagged already, and its only a week into January.

That is, that unemployment would go over 5%. It reached it this morning.

Total employment actually fell today in the NFP report. The household survey showed a loss of nearly one half million jobs. (That counts 1099s, self-employed, etc)

This is a horrible report for December, given the normal strong demand for seasonal employees. Christmas? Uh, no, Grinchmas.

This is extraordinarily bad. The hourly wage number also went the wrong way (up). The first quarter is going to be horrible; this confirms the expectation of a poor shopping season for Christmas (that I've been saying all along), and now we have deteriorating employment, which is always a lagging indicator on the economy.

In other words, we are almost certainly already in a recession.

THIS IS NOT PRICED IN!

When will "Mr. Market" get it? It looks like it starts today. The S&P Futures tanked instantly on the release, down over 15 handles, and got a LOT worse as the day went on. We have now confirmed the Head and Shoulders patterns in the S&P and broke the triangle in the DOW, which is basically a crash call - not instantly, but over the next few weeks to couple of months.

What else is there to say here? I took a lot of risk down yesterday and now its obvious that this was early. Did I leave a bunch on the table? It looks like it. On the other hand, I can be incredibly nimble now, trading mostly the futures market, and can deploy insane leverage yet never leave it open overnight. Today, once again, I took nearly everything off into the close.

This contributes greatly to the depth of my sleep, and that's invaluable.

Folks, do not count out the bear market rallies. They will come. But note that the downside targets that I had originally identified - 1220 in the SPX for the short-to-intermediate term, and 1070 in the next year or two - certainly look good here with a recession pretty much "in the bag."

This does not mean we will go straight down to those levels.

We will not.

But it does mean that if you're long equities, and unhedged, you're likely to get an ocular penetration experience not seen since 2000.

I've been trying to warn people..... but so many have scoffed...... welllllllll.... if you're long, especially in tech, how are you feeling today? BTW, the store is out of Preparation "H"....

Here's the technical!