How will corporations deal with the new Obama taxes needed to fund the new state and federal workers, union expansion and ACORN

How will corporations deal with the new Obama taxes needed to fund the new state and federal workers, union expansion and ACORN that were funded by the $800 billion stimulation package?

Dear Employees:
The board of directors of this organization and I our CEO have resigned ourselves to the fact that President Barrack Obama is our President and that our taxes and government fees are increasing to cover new state and federal government jobs, unions and other contributors to the presidents campaign, and political organizations like ACORN. To compensate for this government growth, our prices would have to increase by about 10%. But since we cannot increase our prices right now due to the dismal state of the economy, we will have to lay off sixty of our employees to cut costs. This is a great concern since we have been family here and it is difficult to choose who would have to go.

World Outlook
Eurostat, the EU's statistics office, said industrial production fell by 0.6 percent in October from the previous month stoking fears that the recovery from recession in the eurozone will be slow. The decline was expected after figures last week showed German industrial output slid 1.8 percent during the month.
The data suggests that the eurozone economy will not expand as quickly in the fourth quarter as the third quarter's 0.4 percent gain, especially as separate Eurostat figures showed employment rose 0.5 percent in the third quarter, equal to the second quarter increase.

For the 27-country EU as a whole, which includes non-euro members such as Britain and Sweden, industrial production fell by 0.7 percent in October following a modest 0.1 percent increase in the previous month. Compared with October 2008, industrial output was 11.1 percent lower for the eurozone, slightly better than the 12.8 percent decline recorded in September. For the EU, the annual decline moderated to 10.2 percent from 12.2 percent.

According to a central bank survey of about 100 economists published today, Brazil’s economy will contract 0.26 percent this year compared with a previous estimate for 0.21 percent growth

Market Outlook:
U.S. stock-index futures rose, indicating the Standard & Poor’s 500 Index is poised for a good start, after Abu Dhabi provided $10 billion to Dubai to help with debt repayments. Futures traders are reducing bets for gains in two-year Treasuries as Federal Reserve officials meet this week amid signs the tax and expanding government based economic recovery may be inflationary. The U.S. may have avoided the Japanese disease of prolonged stagnation only to end up with a dose of eurosclerosis: chronically high unemployment in a growing economy. In a survey, chief executive officers of more than a dozen U.S. companies said that President Barack Obama’s $1 trillion health-care overhaul won’t buy corporate America relief from medical costs that more than doubled in the last decade.

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. Four 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 (of the head and shoulders formation) occurs to confirm the head and shoulders sell signal. 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% 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 two weeks remain in the Christmas season rally.

This Week
Monday, Dec. 14:
Treasury bill auctions

Tuesday, Dec. 15:
Prod. Price Index
NY State Mfg. Index
Industrial Production
Housing Market Index

Wednesday, Dec. 16:
Consumer Price Index
New home starts
FOMC anncmnt

Thursday, Dec. 17:
Unemply Claims
Leading Econ Index
Phila Fed Index

Friday, Dec. 18:
Quadruple-witching expirations.

Market forces December 14
We estimate the NYSE must still rise 3% 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 1.7%, Hong Kong up 0.8%, India down -0.3%, Japan down -0.1%, Seoul up 0.5% and Taiwan up 0.3%.

European markets are up with the average in a range from +0.5% to +0.9% this morning about half way through their day.

US pre-market futures up by about +0.5% today at 7:30 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% 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 four 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.