Two things should not be overlooked one the unemployment rate has been holding
steady for months. Is this a harbinger of turnaround? Second from next week the news
shall be dominated by actual earnings.. now that is the trickiest bit for traders like us..
Ike:
Unlike other recessions unemployment has remained relatively low... But, we seem to be seeing the rate of layoffs accelerating... This suggests the possibility of a double dip recession where the bulk of the unemployment comes just when you're expecting a turnaround...
One could argue that we've seen the worst based on the warnings so far... They could also argue that there was a slight drop in Qtr to Qtr warnings... But, I was suspicious in February when most pundits saw a second half recovery... I get very uncomfortable when there is too much agreement in either direction... : > Now we are beginning to hear a chorus of recovery in 1 Qtr 2002... That makes me feel like we may not see a recovery until the 2nd Qtr of 2002... One could argue, and I have argued, that the FED usually wins when it cuts rates... The question is whether or not we go into extra innings for a decision on that... In the meantime, the market is entrenched in the BEAR claws for now...
The battle around the 2000 area on the Nasdaq gave some hope for the Bulls on Friday... I think we'll see a break below that area on Monday or Tuesday with 1900 as the new battleground...
stockcharts.com[m,a]daclyymy[pb50!b200][vc60][iUb14!La12,26,9]
The pattern, while not as steep, looks similar to the formation just before the big slide in March... Even if the 2000 area holds for a while it sets up a Bearish head and shoulders formation...
So, while I hope for a turnaround, I'm bracing for another return to the April lows...
Jim |
