Market comments for April 28th

Yesterday, Fed Chairman Bernanke had the first ever News Conference for the Federal Reserve, which was not covered by many cable stations like CNN, as they were consumed by the news the President released his long form birth certificate, but nevertheless Bernanke made some news to me. We have been told for a long time that the recovery is "Moderate, but Main St. doesn't believe it. It seems very slow to Main St. So during yesterday's news conference , several times Bernanke commented that the "recovery" was moderate and moments later called the "recovery" slow. So all this time over the past 6 months to a year, the Fed was using language to imply the economy was growing faster than we all knew was false, but more encouraging to those on Wall St. who wanted to believe it was faster than we all experienced on Main St. Today's release of the GDP numbers and the Initial Unemployment Claims verify that the Emperor has had no clothes on.

Initial Jobless Claims released today showed that 429K new claims were filled against an expectation of 390K Initial jobless Claims. That make now several weeks in a row where these claims have exceeded 400K. Last week the number came in at a revised 404K Initial Claims. And the week before, on April 14th that it was 412K. Not since April 2nd have the claims been below 400K, coming in at 390K.

GDP numbers released today for Q1 came in at only 1.8% versus the prior period reading of 3.1%, which shows the economy is in a very significant slowing. In order to have more jobs for the unemployed, we need about a 4% GDP. Also, having a low GDP number is bad for the debt we carry, because overall debt % is compared to % GDP to determine whether we can pay back our debt as promised.

Today's numbers were not good no matter all the hype you hear to the contrary. The Dow Futures are down this morning following the data release.

Today's post market analysis

Well, I was correct that the market started selling off when Barack Obama started his news conference. The Dow was up to 253 when he began speaking but then quickly dropped to up only 90 points. After he finished his news conference the market went back up and ended at 248. This was very close to where Barack Obama started his speaking. What does this mean. Well, first, it was very predictable that the powerful don't like the idea of an Obama Administration. Secondly, with such terrible Unemployment numbers today, the market rally did not make sense and we know it is going to much worse.

So if I were any of you today, I would have been buying more Ultra Short ETF Funds on the S&P 500 Index, symbol SDS, and on the Dow, symbol DXD. The fact you ventured in today shows your courage. My goal is to have you preserve capital and at the same time use the trend as a friend. The trend now is down or flat, not really up.

One indicator I thought particularly illuminating was Insider Trading. I have been watching this indicator the past few weeks and have noticed that the ratio of Insiders Buying vs Selling favored the Sellers. The ratio was that for every Dollar Insiders were using to buy shares of their company, there were 3-4 dollars in selling of shares. Today was much more dramatic but that is only because 5 Insiders sold 7.5 Million shares of Marriott International Inc. today That made the ratio over $15 of Sellers to every Insider buying with $1 dollar.