"The market is deeply cynical of what’s going on and no one in Washington has any more idea than a goat what they’re doing," said Peter Sorrentino, who helps manage $15.5 billion at Huntington Asset Management in Cincinnati. "Unemployment numbers are going to be bad for a while."
Yesterday American markets recovered in the last hour when short sellers concluded the resistance level would hold again and the rally would likely resume.
According to our Re-spiral indicator if all goes well our indicators show the market now still has at least three weeks of life left to rally. If the indicators tanked now it would leave at least a week left to completely liquidate stocks. Cash flow wise, the market is sound but when the market is so close to resistance levels and when the administration is hysterical and seems clueless they themselves destroy the hope, trust, and confidence needed for economies to function. Obama himself is now the world's greatest liability of a Great Depression. Even if his sky is falling hysteria does not cause an immediate depression his taxation and spending will leave us with a stagflation bubble much larger than the Jimmy Carter malaise left to President Reagan.
Last night Asian markets were up with China up 3.2%, India up 1.8%, and Japan up 1%. Hong Kong was up 2.5%.
At this moment most European markets are up between 0.5% and 2.5%. The US market futures indicate a higher opening this morning.
There is a lot of headroom left for this market to rally. The CBO TV special last night may make Americans more confident that we can clean up the sub-prime mess. Geithner also now realizes it has to be a worldwide effort for two reasons. First banking and stock market regulations need to be uniform or else they break down to the least restrictive code. Stimulus packages weaken the currency so they need to be done together to reduce national currency imbalances.
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