Good Gap up Morning,
Once again most of the meaningful moves are happening overnight when most people have no chance to act unless they are managing their positions correctly with stops. At any rate, the /ES reached 887 this morning which is just below the SPX 890 area where there is a powerful uptrend line that should offer resistance. Here’s a chart of the overnight action:
It sounds like Chrysler is going to file bankruptcy, possibly today. This is what should have happened a long time ago. Actually Chrysler should have been allowed to fail back in the early ‘80s before the K-car. This whole bailout mantra is moral hazard in the extreme and America will pay the price dearly in the long run as the same losers are allowed to operate, dominate, and squeeze out new entrants. When was the last time a new American automobile manufacturer was allowed to flourish? Too big to fail is total BS, it is in America’s interest to let the big guys fail when they fail.
Profits plummeted 58% at Exxon Mobile, poor bastards only earned $4.55 billion this past quarter after earning more than $10 billion the quarter before. Heck, $4 billion is chump change in this QE Zimbabwe environment.
Unemployment claims fell 14,000 down to 631,000 last week. Yet another week above 600k, and another new continuing claims all time record at 6.27 million.
So, this never ending rally continues to gap up as more and more believers think the banks and the consumers are holding up just fine. I assure you that without government guarantees behind everything and their complicit help in hiding the true value of assets, that even the façade of a declining rate of free fall wouldn’t be supported. I will also assure you that people buying stocks at this level are about to be taught another very sad lesson in the continued robbery of America.
While we may touch 890 today, I do not believe we will be able to break that level at this time, at least not by any significance.
I am working on assembling some documents that Martin Armstrong is offering as “proof” of his innocence and I will present those probably later today or tomorrow. This will be controversial, I’m sure, and that’s exactly why I’m going to post them. While I am going to remain agnostic as long as I only have one side of his personal case, the issues he raises about the rule of law are absolutely correct and critical to understand about what makes an economy strong and vibrant.
Have a good day,