Thursday, March 10, 2011

Market comments for March 10th and some political comments as well

Not much has changed with respect to the stock market as a result of yesterday's action. As I said several days ago we have formed a wedge of an ever tightening range. This means we are getting closer to that breakout either to the upside (which I do not believe will happen) or to the downside, which is more likely in my view. Conditions in Libya are getting more precarious daily, as rebels are pushed back by Kaddafi's mercenaries. Today's jobless claims report rose more than expected and came in at 397K, just shy of the 400K. This set a negative tone in futures this morning.

The chart below of the S&P 500 shows that wedge and how the range tightens each day. Today the market is starting lower but it is down now almost 200 points on the Dow and may actually break below the range today. Watch for any breakout to confirm market direction going forward.

In Wisconsin, the Republican Senate stripped out the Collective bargaining section of a bill which had financial elements so the Bill could be passed with the Democrats away from the State to protest the maneuvers to kill the Unions. This issue is becoming a rallying point for Democrats who see Republicans tied to the business sector push to remove Unions from being a factor in the next election. The Unions have organized for Democrats and gotten out the vote and helped fund many a campaigns. Getting rid of Unions will allow big business with their hordes of cash to dominate the process, thus ensuring Republican candidates win. When they win they will remove all remaining regulations on Wall St. They are waging a war on the Middle Class and with this last effort, they are winning. The people must take to the streets or this illegal move will stand. These tactics are being pursued in 16 northern states,

UPDATE 7:00am
Here is the updated chart of the S&P which includes the early market trading. It clearly shows we have broken lower and outide the recent tight range!

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