Thursday, March 03, 2011

Market comments for March 3rd, 2011

Europe has been up in their markets this morning in advance of our Initial Jobless Claims numbers which were released at 5:30am PST. Expectations were for 400K and the Prior period data from last week was 391K. Today's number cam in at 368K Continuous Claims, which under-reports those who remain without work but not those who have either given up hope or are under-employed using part time work to survive, came in at 3.77 Million Claims. Q4 Productivity came in at 2.6%. This shows workers continuing to be extremely productive and thus removing the necessity for employers to have to hire more workers. Unit Labor costs were down 0.6% for Q4, which could mean that companies made more profits at the expense of workers.

I have attached 2 charts this morning of the Dow. One is the latest 3 month chart which shows we are forming a short Head and Shoulders pattern. The pattern would indicate a leg up is due today. On the 1 year chart I have drawn 3 red lines showing the various bands of support visible. If we penetrate the lower red line, it will mean we are on our way down in the market and the downtrend is convincing. My guess, based upon a Dow Gold ratio of 8.5 would mean that the Dow would rise today to 12,104, about a 38-50 point gain today, because Gold is down today to $1424/ounce. We shall see.

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