Test investor reaction to NFP number, then maybe lighten up.
Steve Cook on Disciplined Investing

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Economics

   This Week’s Data

    December non farm payroll fell 524,000 versus expectations of a 500,000 decline; unemployment rose to 7.2% versus estimates of 7.9% and 6.7% recorded in November.  While worse than officially anticipated, the universe was assuming a horrendous number.  Most of the below links are graphic depictions of the various components of the headline number:
    http://www.calculatedriskblog.com/2009/01/employment-declines-sharply.html
    http://bespokeinvest.typepad.com/bespoke/2009/01/december-employment-report-inline-with-expectations.html
    http://econompicdata.blogspot.com/2009/01/less-education-hurt-everyone-unmployed.html
    http://econompicdata.blogspot.com/2009/01/unemployment-way-worse-than-72-due-to.html
    http://econompicdata.blogspot.com/2009/01/broader-unemployment-to-135.html

   Other

    Will labor get card check legislation?
    http://www.ibdeditorials.com/IBDArticles.aspx?id=316137671926133

    The latest forecast from a renown bear:
    http://www.forbes.com/opinions/2009/01/07/recession-stimulus-spending-oped-cx_nr_0108roubini.html
   
    More negative feedback on Obama’s tax cut proposal:
    http://www.american.com/archive/2009/why-obama2019s-2018tax-cuts2019-won2019t-work

    A scathing analysis of Paulson’s execution of TARP (must read):
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aAvhtiFdLyaQ&

    This is a long piece but it lays out the risks of current monetary/fiscal policy.  It will also make you want to run out and buy gold immediately.  If you don’t have time to read it today, save it and read over the weekend.
    http://www.ritholtz.com/blog/2009/01/hard-truths/


Politics

  Domestic

  International War Against Radical Islam

The Market
    
    Technical

    Some chart porn on investor sentiment:
    http://bespokeinvest.typepad.com/bespoke/2009/01/investor-sentiment-shows-improvement.html

*********************************************

    Yesterday’s pin action was a little deceptive.  The DJIA closed down (8742) while the S&P was up (909).  Both remained below their December 2008 highs (DJIA 9025, S&P 918) and above the minor up trends off the November 2008 lows (DJIA 8694, S&P 888).  However, most of the stocks in our Portfolios were up, some by a good deal.  The volatility index was down slightly but finished the day above the December 2008 to present down trend.  Volume continues to be light.

    The non farm payrolls number was universally expected to be terrible.  However that has been the case for the last couple of months and each time, stocks were up.  I want to watch the Market open to see how investors react to this statistic.  Barring a price explosion to the upside, our Portfolios will likely go from 21% to 22% in cash.  If so, I will notify you via Subscriber Alert.

   Fundamental







Posted 01-09-2009 8:34 AM by Steve Cook