Just a reminder, I was quite bullish on Obama as were most Americans when he was elected because he was well spoken and the Republicans could not find qualified candidates to run against him. But by the end of his first month in office he showed us his communist advisors and demonstrated his complete ignorance of economics. Remember Obama did not even know the function of the stock market or what a PE ratio was. By the end of February I lost all faith in the Obama administration. Now most Americans wonder why they ever thought he any good.
World Outlook
China was going flat since August but the most recent low was lower that the previous low and the current high is also lower than the previous high indicating the market rally is about over. Asian markets have recently led the Western markets upward and will likely lead us flat and back down.
http://finance.yahoo.com/q/ta?s=000001.SS&t=6m&l=on&z=m&q=l&p=&a=&c=
Good news… Dodd plans to announce he will not run for senate this year. It would be wonderful if Rankle (or is his name rancor) would resign this year too so we would be rid of the two on the Senate Banking Committee that enabled liars and cheats to get government backed home mortgages that subsequently brought down the entire world economy. It was reported that 60% of public pension plans lost so much due to Senate condoned home mortgage fraud that they have a huge shortfall of funds needed to meet future pension requirements of public employees including teachers, firemen, local and state government employees. No the Terminator wants a private sector taxpayer bail out.
Market Outlook:
This current stock market rise off the March 2009 low still has the look of a bear market rally comparable it to the bear market rally and subsequent collapse of 1930. The recovery did not come in 1930, in fact the Great Depression had barely started, and the stock market suffered losses of another 85 percent measured from the interim bear rally high of 1930 (where we are by analogy today). The current recovery appears to be far less than expected for the trillions of dollars the Obama socialists have squandered on ACORN criminals and the socialist welfare class they hope to cultivate to control American elections in the future. Obama was the first to achieve critical mass of indigents and self-loathing Americans who truly relish living the good "don't worry" life of third world citizens. America, the last bastion of "true liberty" creativity, scientific research, advanced medicines, and free enterprise traded "nationalist socialism/world communism" for a brief moment of about six months before the "Tea Parties" showed that most Americans have already had their fill of totalitarianism. Socialist totalitarianism exploits crises to build a voter base of indigents and then buys off the indigent to maintain a voting block. For every government job created for an incompetent political hack the private sector loses 1.6 private sector jobs. The people in make-work government jobs are not counted as unemployed. So in countries like France there is usually at over 20% unemployment when you include the unproductive patronage jobs and the short work-week that people who pretend to work prefer.
In 1990 the Japanese mocked American free enterprise by calling it "cowboy economics" because American growth requires creative destruction of the outmoded jobs to motivate workers to learn new needed skills. Japan's dream of permanent jobs has resulted in 20+ years so far of deflation and recession.
The final numbers are in. The Obama ‘cash for clunkers’ program last summer resulted in the sale of 320,000 Japanese vehicles in the U.S.
The Institute for Supply Management’s factory index rose to 55.9, the highest level since April 2006, according to the Tempe, Arizona-based group.
Spending on construction projects dropped 0.6 percent in November, to the lowest level in more than six years, the Commerce Department said today in Washington.
Yesterday:
Factory Orders showed 1.1% growing demand in November for a wide range of U.S. factory products, signaling the potential for stronger-than-expected fourth-quarter gross domestic product. Demand beat forecasts.
The National Association of Realtors' index for pending sales of previously owned homes - a forecasting gauge of housing-market activity - slid 16% in November. That represents the first decline in the index in 10 month, and more than triple the size of the drop analysts had expected.
Wednesday, Jan. 6:
ADP Jobs Report
FOMC minutes
Thursday, Jan. 7:
Unemployment Claims
Friday, Jan.8:
December unemployment report
Market forces January 6, 2010
We estimate the NYSE must rise 0.6% 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. At this point it appears the rally is over. The next sell confirmation will be if the neck resistance level (of the head and shoulders formation) breaks down on the volume adjusted NYSE market cash flow index. The modified MACD indicator gave a sell signal.
Asian markets were up slightly over night; China holiday, Hong Kong up 0.6%, India up 0.1%, and Japan up 0.5%.
European markets are down with the average in a range from 0% to -0.4% this morning about half way through their day.
US pre-market futures down about -0.3% today at 8:00 AM EST.
History then tells us that the current stock market rally is not sufficient to suggest that the worst is over. We have inefficient nationalized medicine on the plate with 50 million new entitlements for illegals and indigents who do not share the American work ethic, and $trillions of debt burden to give Acorn and other indigent socialist supporters pretend jobs that pay them with real taxpayer's money to vote for socialists. In former socialist countries and many current socialist countries (even Iran) if you do not support the regime you cannot have an education or a decent job. Control of government jobs is how dictators stay in power. That is why intelligent people flee socialism. That is why so many British, Canadians, Europeans, and Indians try to become American citizens. They used to call America the land of opportunity and we call the immigrants the world brain drain to America. With Obama socialism that era will rapidly come to an end.
We are now preparing for a possible market decline in early 2010 that could take prices down to at least the old high where stocks were at the end of May seven months ago. The last two Januarys have been quite ugly although in 2009 the market surged more than 2% on the first January market day.
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