The latest GDP revision for the 4th quarter of ’08 came in at minus 6.3% growth after being reported in the previous revision at -6.2%. It’s all okay, though, because “economists” surveyed by Briefing.com had collectively guessed -6.6%. I wouldn’t even venture a guess personally; the data to input is completely disconnected from reality. I would tend to look more at the shipping indexes and the fact that imports from Japan are cliff diving to signal what’s really happening. In other words, I don’t trust nor do I have confidence in our own numbers.
And speaking of data that is “molded” by things like seasonal adjustments, the weekly unemployment number for last week came in at 652,000, an increase of 8,000 from the week prior and the 8th straight week of numbers greater than 600,000. The number that is most trustworthy in the data is the continuing claims data which rose this week to 5,560,000. Just remember, once a person’s benefits run out, they are no longer counted at all.
Here’s the overnight action, it was a pretty steady climb and the /ES is up nearly 8 points:
The race off support at 795 was very bullish. On the other hand, I see an odd megaphone forming in the indices and IYR has built a more clear megaphone. Those used to mean ending patterns, but during this bear market that has been a low odds bet. And when they break as a continuation pattern, the break tends to be violent.
I think Doc nailed that curved channel on the NDX, and that is also a bullish development, so you can go back and review his last update to see those charts.
Support seems to be in that 795 area, there’s a pivot 789 below us and the one above us is at 848. There’s also a channel that’s formed with a top in the 830 area today. It’s also the top of the odd megaphone that’s formed.
Watch the bond market again today, yesterday was a warning shot across Bernanke’s bow. The people who ignore what’s happening with our debts are the ones who have been and will continue to be on the wrong side of the overall trend.
The pumpers on CNBS are talking about “generational lows” in stock valuations and thus you need to be in. I’d like to know what they are smoking. P/E ratios are still above historic averages and not anywhere near bear market bottom range. Maybe it’s a generational low if you’re a ten year old…
Have a good day,