Japans 3Q GDP surprises with 4.8 percent growth and beats USA 3% growth.

Market Outlook

But Liu Mingkang, chairman of the China Banking Regulatory Commission, said, “The continuous depreciation in the dollar, and the U.S. government’s indication that, in order to resume growth and maintain public confidence, it basically won’t raise interest rates for the coming 12 to 18 months, has led to massive dollar arbitrage speculation,”

Liu told reporters in Beijing that low rates and the dollar’s recent tumble have “seriously affected global asset prices, fuelled speculation in stock and property markets, and created new, real and insurmountable risks to the recovery of the global economy, especially emerging-market economies.” Liu spoke two days after Donald Tsang, the chief executive of Hong Kong, said the FED's policy of keeping rates near zero risks sparking the next financial crisis. This new criticism of the Fed and asset prices comes years after some analysts criticized the U.S. central bank for holding down borrowing costs for too long in 2003 and 2004 causing the bubble that collapsed and gave us the current crisis.

It all sounds as though China may allow their currency to appreciate and help equalize the trade deficit with America which would be a threat to China's exports and recovery and would begin inflation of export prices in the USA. Gold continues to rise in price. In Europe fuel and food price declines continue to cause deflation and a strengthening of the EURO.


This week
This is an important week. We expect retail sales rebounded in October, production climbed and work began on more houses.

Monday, Nov 16:
Oct Retail Sales
NY Fed Mfg
Bernanke speaks in NYC
Sept inventories

Tuesday, Nov 17:
Industrial Production & capacity
Producer Price Index
Sept Trade balance
Richmond Fed

Wednesday, Nov 18:
Consumer Price Index
Housing Starts

Thursday, Nov 19:
Unemployment Claims
Leading Indicators


Market forces November 16
Many indications are that the economic situation in China is sputtering and China is not the world economic engine that American was before Obama. The anticipated spike upward began last week and is yet to determine if we have a continuing rally or a head and shoulders sell indication. We must use the broader market of the NYSE for this analysis not the Dow or S&P which easier for funds to manipulate. We will use the rally to get back into cash.

Asian markets were up last night; China up 2.7%, Hong Kong up 1.7%, India up 1.1%, Japan up 0.2%, Seoul up 1.3%and Taiwan up 1.7%.

European markets are up with the average in a range from 0.9% to 1.5% this morning about half way through their day.

US pre-market futures are up 0.8% today at 7:00 AM EST. The broader NYSE has not set a new high yet for this rally. The rally resumed last week. If the NYSE does not set a new high this week the mutual funds may start selling. If the new high is not almost 3.4% above the

This Obama malaise market is treacherous for stocks that had advanced sharply with previous optimism. Now individual stocks often drop very sharply. It is important to be able to get out of stocks quickly and possibly completely if the NYSE does not set a new high at lease 1.9% above the last high. That requires a 3.4% advance from where we closed Friday to avoid a head and shoulder bear market formation not the smaller 1.4% rally that would have been necessary if volume had held up.

While the DOW is at a 13-month high the broader American NYSE, has not yet reached new highs. Our indicators say we are likely near the top of the USA market for 2009 and perhaps the next six months. That is to say our cash flow index indicates that cash has been leaving the market for over two months. The markets in China have stalled and have been moving sideways since August. A sideways volatile USA market also occurred under the Jimmy Carter Malaise during the 1970s. The radical left also thought Jimmy was very smart and that Ronald Reagan was dumb. The opposite proved to be true. Reagan said, "Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same."
It only takes one Obama to lose freedom and institute another socialist tyranny of government enforced mediocrity.