by Keith

Yesterday I posted my thoughts on how I felt the market would drop for several reasons. The most relevant to this post was the release of job numbers. As expected, layoffs increased and unemployment is now at 8.5%. Despite an initial drop, the market did not react negatively to this news by finishing in positive territory. I find it frightening the recent trend in the market to shrug off negative information. This is especially disconcerting since unemployment numbers are traditionally one of the last numbers to buck the trends in a recession. Clearly investors feel that actions currently in place by the movers and shakers has “fixed” the situation, and are comfortable investing in the long term. Clearly we must act accordingly and focus on long term investment, since the short term implications of this are highly uncertain.

by Keith

For the sort of multi-day rally we witnessed today, we can normally expect to see some sort of recoil. In addition, we have seen a possible trend develop with decreases prior to the weekend. Job loss figures will be announced tomorrow morning, and I am not optimistic. I expect these numbers to increase from the previous month. Ultimately you must ask yourself how much weight the enthusiasm from earlier in the week will defend against bad job numbers? Myself being the pessimist feel I must guard against what is simply a rally in a bear market.