“Only government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless” -Milton Friedman
Get over the abysmal jobs number. Newsflash, there really aren’t any jobs. So many have stopped looking and many are pimping disability, don’t get me started on food stamps. Part time crap is everywhere, but corporate America is not unloading its firepower and hiring. Government unemployment is just about 3.2% which I guess is considered better than the historical definition of “full employment”. Booyah for the government. They never created anything.
Private companies are still hoarding cash and keeping it ever so close to the vest, (still,five years later). Earnings look OK, but that’s mostly due to cost controls and not super duper organic growth. There is no growth. But multiple expansion will take care of that.
We cant go it alone, China is on its ass again (after a brief head fake higher) and Europe is in a friggin’ depression.
But that’s OK for now, the economy isn’t the market (if you don’t know that by now you never will), so things should resume higher, although I don’t think a 20 handle decline from Tuesday’s intra-day high to Friday’s close, is enough to clean out some profit takers and establish a basis for a new powerful leg leg higher. Bulls should be begging for 5% down so they can enter at better levels and clean out weak hands. Things need to breath. If we go straight to 1650, the the second half wont be any fun at all unless you’re good at shorting.
The things that you don’t want to go higher in a risk on environment, like utilities, are making new highs, so it makes you wonder if some risk money isn’t looking to hide for a spell. I’ve seen this before and it can be a “tell” that the market is due for a correction. I’ve also seen where it means nothing. Since early March, the 10 year treasury has gone from yielding 2.08% to a closing yield on Friday of 1.69%. That’s a pretty good move, especially when we are supposed to be in the throes of unbridled enthusiasm and a new “gilded age” for stocks. But stocks do correct, so no biggie I guess.
If anything, Friday’s disastrous jobs report should fuel the Fed to keep things this way far far into the future. Obviously bullish for stocks.
Never let a a rotting domestic and global economy get in the way of a good bull market….especially when the Fed has your back. All the cool kids are doing it….even Japan. Right now, this market is just on loan from Bernanke. It will be easier to find Jon Corzine and Jimmy Hoffa than Bernanke when its time for the exit.
Smaller positions tighter stops here.
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