Have a good weekend BIll. Root for them Vols in tomorrows game, will ya? -g- Here are some comments from a soon to be unemplyoed chief market strategist (no, not you Bill! -g-)
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September 3, 1999
What a joke! The Spinmeisters this morning are spinning the 1-month employment numbers as roaring bullish. Somehow or another they are living in a different world than I am. When I drive down the street I see in every window signs begging people to come work for them. The weekly unemployment insurance claims are now hitting 26-year lows. The subcontractors working on my house tell me almost daily how they can't find anyone to hire. But now I hear that retailers and construction and manufacturing employment is down, and all of a sudden the market futures are roaring this morning, because a slowing economy is supposedly good news. At the same time the Commerce department told me that corporate earnings that are adjusted to the real world were actually down last quarter. And it is good news that the economy is cooling.
I hear the Boeing union leaders tell the world that they got "everything they asked for" in their 7% annual wage gains just negotiated. And then the government tells me in this very "tight" job market that wages are subsiding, and the stock market believes that. You've got to be kidding.
Oh well, don't forget the market on these "pre-holiday" days are strongly biased on the upside, as pre-holidays find lower volume and makes the trading influences much stronger. But despite today's nonsensical action, keep your eye on the real trends. We have seen breakdowns in recent days on many of those stocks I have been referencing, i.e. Coca Cola, International Paper, Dayton Hudson, AMR Corp. After breakdowns, you often get bounce-backs to those resistance zones, so we'll have to watch this action in the days ahead.
But stay tuned. The next two months are bringing all kinds of new tidal waves. Almost daily news about China's devaluation and mounting prospects of war with Taiwan are surfacing. Most of those projections say that they will hold off until the October period--giving time for preparation and letting their month-long 50-year celebration of the People's Republic of China complete.
The rise in commodity prices also is even more evidence that the Fed (contrary to today's celebration) will raise interest rates at their next meeting. The acceleration in these prices has just started blasting off, and needs to be checked in a hurry. We also see the drop in the dollar/yen relationship dangerously close to the 108 major breakdown level.
So there are a lot of little waves forming on the surface. Are they going to attack the mainland, or just make a lot of wind before heading out to sea? Nothing is guaranteed, but I am putting up the storm shutters, extra tight.
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