World Outlook
The dollar strengthens with increasing relative strength of the American economy to more socialist economies and Japan. Only Obama still has the power to spend America into another "Great Depression" as FDR's early socialism experiment did in the 1930's. Only WWII and the need for free enterprise to bail out the world got FDR to stop end socialism and that saved the world economy. But it took over ten years of depression to reverse the damaging effects of FDR's early socialism.
Brazil’s economy expanded less than expected in the third quarter the national statistics agency said today while Brazil's inflation quickened for third straight month in November. Brazil’s central bank signaled it would keep the benchmark interest rate at a record low in coming months as the government extends stimulus measures to bolster growth.
Mexico is said to be ready to default again.
The Argentine government issued a decree authorizing a partial default.
The world of socialism is bleak. The leftist Obama administration has turned out to be more dangerous to American liberty than anyone believed before his election. A 50% retracement now of this year's 60% stock market gain would not be unusual in this situation where Obama high point was nationalized and destruction of GM to save union votes and financial support. GM is now among the living dead; just another money pit until it gets liquidated. Instead of stimulating the economy with a tax break to Americans who have been successful in creating wealth, Obama has given $800 billion to his supporters who are expert only in creating envy and discontent and in dissipating other peoples money (OPM). He gave $300million in aid to buy one Congresswoman's vote just last week.
Socialism is legal government of, by, and for sycophants. Socialism does not have to be Stalinist or Nazi to be tyranny. Socialism is tyranny in any form even when it is just two people democratically voting to expropriate the fruit of a third person's labor. Now Obama wants to extend his same failed political give away program though 2010
Market Outlook:
The U.S. and the world are near the top of the biggest stock market bubble since the 1930s. We have given precise calls in the past of interim tops and bottoms. Five more days like the last could cause simultaneous respiral (modified parabolic SAR) and the modified MACD indicator sell signals. The MCF (Market Cash Flow) index gave a sell signal some time ago and the volume adjusted NYSE index is about ready to show its second shoulder sell signal. Some people would wait until the neckline breakdown occurs to confirm the head and shoulders sell signal. It would be unusual, but this year the way things are going right now, this market could correct before Christmas rather than in January as we were expecting.
The NYSE is now 3.7% below the required sustainable cyclical bull market's head level and thus is still a declining shoulder. It is not looking good for a continuation of the current market bubble as less than three weeks remain in the Christmas season rally. The $800Billion union/welfare stimulation package has been spent but when one gives cash to featherbeders, shirkers, socialist comrades, and lazy people one does not create jobs. Obama, the community activist, would like us to believe he did not know that one only buys votes his way. Americans are increasingly unhappy with Obama's socialism.
Bernanke and NY Fed president Dudley affirmed low rates would continue into next year easing fears of a rate hike.
Copenhagen welcomed Obama administration climate fraud as the EPA declared that animal breath is a toxic planet gas.
Business roundtable opposes health reform that has a public option, increases costs, or shifts costs to the private sector.
This week:
Thursday, Dec. 10:
Weekly unemployed Claims expected to decline as six hundred thousand workers are removed and join the ranks of those uncounted and thought to be permanently unemployed. There are now six Americans seeking work for every job available. But this is considered good news to socialists because unemployment claims should decline.
US Trade Deficit
Friday, Dec. 11
Nov Retail Sales
UM consumer sentiment
Market forces December 10
We estimate the NYSE must still rise 3.7% from yesterday's close to be interpreted as a continuing rally not a declining head and shoulder sell signal. That reflects both the price change and volume of shares being traded. The market already looks like it is topping out. In any event after a possible year end rally a normal -3% to -5% downward correction would be due anyway… so it is still wise to take profits were possible. If the head and shoulders sell signal occurs the correction could be closer to -10% to -25%.
Asian markets were mixed over night; China up 0.6%, Hong Kong down -0.2%, India up 0.4%, Japan down -1.4%, Seoul up 1.1% and Taiwan down -1.5%.
European markets are up with the average in a range from 0.4% to +0.7% this morning about half way through their day.
US pre-market futures rising at the moment by about +0.2% today at 8 AM EST.
It is important to be able to take stock profits soon if the broader market of the NYSE does not set a new high at least 3.7% above yesterday's closing price and on above average volume. Continuation with the current market bubble looks like it now will be a bumpy lateral ride. The downside risk could be as great as 25% now given the mess leftists in Congress and Obama are creating. A deep market slide could begin as early as is five business days. This potential decline would indicate that the socialists in congress and the more radical Obama administration is setting us up for a worldwide depression in six to twelve months with high taxes kicking in during 2010.
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