Capitalogix Commentary for the Week of 03/15/10

Breadth Continues to Expand.

The Markets are showing signs of health and strength.  These charts, from Stockcharts.com, show the internal strength and breadth powering the move higher and supporting the current rally.

Here is an intra-day chart of the S&P 500 Index for the past three weeks. It is a modified version of something I saw on Breakpoint Trades' site.  It shows the decision-point; price has pulled-back to the trend-line. 

In bull markets, this is where Buyers tend to appear.  In contrast, Sellers probably see the bearish wedge and negative divergence as signs of waning momentum.  Add the potential sell-signal from over-bought stochastics, and we have an interesting set-up for next week.

Even if the markets sell-off from here, there are now a number of support levels close by.

The markets have continued to do well, what about the economy?  I think the Employment situation is a primary indicator.

We Stand Out - With Respect to the Severity of our Under-Employment Situation.

There is disagreement about whether the recent jobs number was a positive sign.  Some are focusing on the slowing decline; others are focusing on the continued weakness ... still others are focusing on the continued downwards adjustments.  Nonetheless, this chart makes something clear.  Compared to other recessions, the job losses (and lack of job gains), of this Recession are truly unprecedented.

Here is a different way to look at what that chart means.

Business Posts Moving the Markets that I Found Interesting This Week:

• A Gold Bubble? Sure, But Soros is Still In.(HedgeFundNet)
• Increasing M&A Transactions are a Positive Sign of Recovery.  (MSNBC)
• Betting It All On Growth - Will it Fix Unemployment, Deficits & the Credit Crisis? (WSJ)
• The Double-Dip Watch. (FT)
• What Warren Buffett's Annual Letter to Shareholders Didn't Say. (SeekingAlpha)
• More Posts Moving the Markets.

Lighter Ideas and Fun Links that I Found Interesting This Week

• Leave it to Scientists - Happiness Ain't All it's Cracked Up to Be. (NewScientist)
• Why Great Companies Fail? (Forbes)
• Concern that Electrical Grid Infiltrated By Chinese & Russian Cyber-spies. (LastWatchDog)
• BioTech's Next Trick - Printing Body Parts. (The Economist)
• 'Tough Guy': Eight Miles of Mud, Barbed Wire, Broken Glass &Fire. (DailyMail)
• More Posts with Lighter Ideas and Fun Links.

Related articles by Zemanta

• Record Advance in S&P 500 Futures Shows Confidence in Economy (businessweek.com)
• U.S. Stocks Advance as Retail Sales Bolster Economic Optimism (businessweek.com)
• U.S. Stocks Fluctuate on Anniversary of 2009 Bear-Market Low (businessweek.com)
• Misleading Recovery Charts (outsidethebeltway.com)
• Sales Taxes Rising Nationwide (shoppingblog.com)
• The VIX Indicates an Imminent Move Down (seekingalpha.com)