Market comments for May 26th

Initial Jobless Claims for the week of May 21st unexpectedly rose to 424K, while expectations were for only 400K, and the previous week's data was revised higher from 409K to 414K. This recent rend over 400K is going in the wrong direction for a sustained recovery, but the Futures market seems to be shrugging off the news. Dow Futures are up in premarket +21 points for the Dow.

Next Thursday we will see what these 4 weeks of numbers back above 400K Initial Jobless Claims ha done for the May Unemployment rate, but I suspect it is going to tick up to 9.1%.

The 3 Month chart of the Dow below, shows that, while the market gained yesterday, we are still below the 50 day Moving average. Notice yesterday's volume was lower than Tuesday's volume. On a rising day, if you are a Bull, you want the volume to exceed the previous down days.

GDP for the 1st Quarter came in again at only 1.8%, which is far below what is needed for a sustained recovery. I think the facts are starting to emerge that the Fed's QE2 has not done much more than to keep us from sliding back into a recession, but just barely this past year.

European markets are mixed this morning, so that it seems their debt issues don't appear to be taking down their markets today, so we may follow suit. There is less than 0.5% movement in any of the European exchanges at this time.

Monday the markets here are closed, as it is the Memorial day weekend. And remember this about the debt level, it has not been resolved. Politicians on both sides seem to be locked in their positions, with Republicans saying they will not accept any tax increases as part of debt reduction and the Democrats saying they will not accept any reductions in the debt regarding entitlements without some tax increases. All this while the clock is ticking for our government to face default by August. What madness!

Economic Indicators for July 15

Here I am waiting for a flight from Rochester, NY to go home via Chicago and I check the economic news out at 5:30am PST, and guess what, I see more bad news. For a starter, the PPI came in at -0.5 percent, which is another indicator we are in Deflation, not Inflation! Anybody listening out there? And that's with all the stimulation the gov't was allowed to spend. Paul Krugman warned that we needed twice as much stimulus back when the government was deciding what was needed, but Republicans in the Senate and a few Democrats like Ben Nelson and Independent Joe Lieberman wouldn't support any more. In fact they didn't even suppot the amount which was approved by Democrats and Independent Bernie Sanders of Vermont. Thank God they passed what they did!

Here's the other piece of news. The NY Fed announced that the Empire Manufacturing Index came in at 5.0, which is barely manufacturing. Last month the number was 19.6 and the expectation for this month was for a reading of 19.0, so how's that for a taste of reality.

One last piece of data to type on this iPhone, Continuing Claims came in much higher than expected at 4.654 Million Continuing Claims versus an expected number of 4.440 Million Claims. Still think the economy is getting better? What planet are you living on, because it doesn't look that way from where I sit!

I will be watching the market as much as I can traveling home today. God bless the iPhone! Good luck investing or trading.