Only 36K jobs lost? Break out the Party Hats

  • Posted on: March 6, 2010

After 2 1/2 years and a loss of 8 1/2 million jobs, we are happy as a lark to have an unemployment figure where we only lost 36,000 jobs. It seems that after month after month of 200 to 300K losses, what’s left of American business has fired everyone possible.
Even the largest Blizzard in years couldn’t cause any more lay offs.
Right now we have “steady” unemployment at 9.7%. Of course we are not counting the chunk of people who have just given up. That puts the figure closer to 16 or 17%.

Now we can look forward to a 35Billion dollar stimulus package. That’s with nine zeros. If you take the 14.5 million people unemployed officially now, that comes out to basically giving each one of them $2,413 dollars. I think I speak for the majority of US people when I say, I hope that’s enough to prime the pump and get things rolling again.

So, if you’ve been reading this blog, you know I’ve been cautiously bullish over the past 9weeks.
I still think, barring some unforeseen disaster, we will climb a wall of shame, worry, pessimism and distrust for the next 18 months. Soon enough it will be time to start a (gasp) new Presidential election cycle… Excuse me while I run and find my earplugs….

For now, however, we are close to sparking new buying. From all accounts, there is a boat load of cash sitting on the sidelines. At some point we will reach itchy trigger fingers of money managers who missed out on the last 11 month 50% rally back from the March 09 dark days of despair, when we had the Dow at 6440 and the S&P at 666. Remember that?

Here we are now after Friday’s unemployment number. WE are in the middle of the last month of the first quarter. Many money managers will be leaving for 2 weeks of spring break soon. My guess is they will be sitting around the beach or in their ski condos thinking and ruminating about what to do next. I think they may throw the bear card out and get back to doing what they are supposed to do, invest on the long side in ‘quality’ companies.

That being said, I look to the numbers. Fact.. Friday’s cash high in the Dow was 10,587… Just 413 ticks from the 11,000 level… Friday’s cash high in the S&P500 was 1,139…just 11 handles away from 1,150. If we hit those levels, we will have a combination of short covering and new long initiation. I just can’s see any other scenario. At that time, like I said, if we can spur a rally up to 11,440…. You will see a NEWSWEEK COVER OF OBAMA ON A BRONCO RIDING THE BULL UP FOR 5000 POINTS. I guarantee it. The left will be screaming the praises of the one, while they were conspicuously quiet when we were at 6400…..
6400— in the media’s mind that’s W’s fault. 11,400… in the media’s eyes, that is Obama magic…lol just wait and see…

I am cautiously bullish.
I am also friendly longer term to corn and beans. Not so much for Wheat. Wheat needs to flush once and for all. We need to get rid of the oversupply across the world. That’s the only way I see a sustained rally.

My mentor Mark Gold is bullish beans because the American farmer has no beans in the bin. After 30 plus years, Mark is a guy who’s experience and market feel I have learned not to want to fade.
As for corn, I believe we will have a short term puke, but as soon as the farmer sweeps his bins, we will have a floor in for the beginning of a new bull leg.

Good Trading

Use your stops. Because believe me, no one is as smart as they think they are. Stops let you stay in the game, re-adjust and take advantage of the next move.