The oversold market has a technical rally

Market Psychology
United Technologies is going to lay off about 11000 professionals in addition to the 1000 they laid off last December.

Bank bond prices are at risk on concern that owners of formerly safe debt issued by U.S. financial firms will be forced to swallow losses if the industry needs another bailout. That is now causing the yields to jump to record levels compared with benchmark rates in the past month, even after taxpayers committed more than $11.6 trillion to prop up financial firms. With shareholders already nearly wiped out the bond holders are expected be have to swap bonds for new debt that offers reduced 1% to 2% interest rates or 10% of current face value bonds.

At this time we have no indication that the market could form a new bottom anytime soon but economists are now saying the administration's actions are causing damage that could take five years to unwind. And when it unwinds American 401 plans will take another hit as inflation exceeds the Jimmy Carter levels and simultaneously exceeds the Jimmy Carter levels of unemployment. Democrat Jimmy Carter called it his American malaise for which a new index was coined which was the sum of the national unemployment and inflation rates.

Wealthy Democrats like Warren Buffett almost completely avoid taxes investing in commodities and other tax shelters that appreciate with inflation but do not create income until sold much later under Republican administrations, and which unfortunately only hedge against American government spending/waste and do not create private sector jobs. Most commodities are mined in foreign countries. After so many Obama appointees had to quit because they falsified their tax returns it is becoming a joke among Americans that the reason Democrat-Socialists do not favor tax deductions and reductions in economic stimulation packages is because Democrat-Socialists do not pay taxes or have any charitable deductions. They think charity is the role of the socialist benovelent dictator.

Fed Chairman Bernanke is now the only one in government finance who has anything positive to say about capitalism. It is expected for that reason and others that Obama will not reappoint him to a second term. The American Democrat-Socialist agenda requires a complete breakdown of the free market capitalist system for a Constitution change and a power grab.


Market Outlook
The market has dropped so fast that relative to normal conditions it became oversold and a technical rally has been predicted for more than a week. Yesterday was the first leg.

Asian stocks were mixed last night with Shanghai down 1.9%, India down about 2%, Japan up 4.5%, and Hong Kong was up about 2%.

European markets are mixed in the range between -0.5%% to 1.0% mid way through their day anticipating the American profit taking today.

American market futures are currently up about 0.5%, two hours before the market opens but profit taking is expected before this technical rally resumes.