Thursday, July 07, 2011

Market and political comments for July 7th, 2011

Weekly Initial Jobless Claims data came in at 418K compared to last week's data of 428K and an expectation of 425K. This was better than an expected number of 425K and clearly better. The big question is can we get down below 400K again? The answer to that is not if, but when.

According to CNN Money today, " ADP numbers showed a gain in Manufacturing jobs in the Private sector for June of 157,000 new jobs. This is 4 times the number of jobs gained in May. Smaller businesses led the charge in June. Small businesses, defined as those with fewer than 50 workers, added 88,000 jobs in June. Medium-size businesses, defined as those with between 50 and 499 workers, gained 59,000.

Larger businesses, with 500 or more workers, added 10,000 jobs last month."

All US market Futures are up this morning in premarket. It looks like we are making a final push to the previous high of 12,800 before we correct. Clearly a "W" pattern, or Head and Shoulder pattern is forming and may be the last necessary ingredient before the market has its correction. But I have been waiting for that for far too long and I know it.

It looks like the President Obama is blinking by setting a precedent and putting both Social Security and Medicare changes on the table to negotiate with Republicans. This was not a good move at this time as it sets up future hostage situations when the debt ceiling must be raised, as inevitably it will. I am very disappointed in this man on some things and this is one of them. He doesn't seem to have any backbone in him. Very upsetting for Progressives in the Democratic Party. He doesn't have to negotiate on this, when almost 80% of Americans favor leaving both programs alone and untouched. That type of tinkering is best left until after the 2012 election.

To use a biblical reference, he is willing to cut the baby in half. He seems more interested in negotiating that in principles. I hope to God we never are in a situation with this President when we are looking at a military situation where surrender is an option the other side puts on the table.

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