Employment Expands in March
The market exploded
higher yesterday. Nothing can stop the bulls, it's almost like North
Africa, Japan and the Middle East does not exist.
Of course, we know better. And we also know that earnings season is
right around the corner, which will bring us the truth about this rally.
Buy at the end of the day, the bulls have not accomplished anything more
than a great counter trend bounce until 1335 is taken out, although that
looks promising.
The bulls have proven the ability to hold 1250 support and regain
1280 and 1301 support back from the bears. Now, the bulls only goal this
week is to test 1335 and keep 1280 support.
And at this point, I am not quite sure what will stop them. Think
about it, the bulls have overcome war in North Africa, tumult from the
Middle East, Portuguese debt woes, a huge earthquake in northern Thailand
and a nuclear meltdown in Japan - all in the past few weeks. So if the
bulls can persist during times of said crisis, why should a measly little
miss in consumer confidence or any other economic indicator like today's
ADP or Friday's unemployment rate and payroll data, bring the market
lower.
The sad reality is that the economic news will not
matter much. Although if there are any economic indicators meaningful
enough to break the incessant climb of the bulls, it would be an
employment figure.
The run of the bulls is exclusively tied to the free money dolled
out by the Fed from the U.S. tax payer. Ben Bernanke has validated his
inflationary programs with the premise that high unemployment is much
worse than inflation. As such, if inflation or employment remain low, Ben
Bernanke can continue (or expand) monetary programs.
Today the unofficial, but many would say the more reliable, ADP
employment change data came out. The ADP employment numbers are gathered
from the private industry, which means the government does not use them,
but an increasing number of analysts believe those figures are a better
assessment of the employment situation in the U.S. Today, the ADP data
showed an increase of 201,000 jobs this month. While that report is
inline with most analyst estimates of 210,000, it also built on
February's stellar growth of 208,000 jobs. Although the jobs data was
good, I don't think it will be enough to shift the inflationary plan of
Ben Bernanke.
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