Courtesy of Phil’s Stock World
The number of unemployed people per job opening has climbed to 6:
Six is a lot, as you can see from the above chart. 6 means that if you get a job, 5 people absolutely will NOT be able to get a job because you just took the last one. Notice Job Openings are still falling and people without jobs are still rising – this is not a good combination, despite how great you hear things are getting on TV. In the first 6 months of this year, there are half as many manufacturing jobs available, 17% less Government Jobs, 21% less Professional Jobs and 21% less Educational Jobs.
Call me old-fashioned but I still think you need people to work in order to have a strong economy. If we have 10% unemployment (the “official” number) and only 1 in 6 people COULD get jobs if they filled every single available opening tomorrow. That still leaves us with 8.5% unemployment. We are miles and miles away from creating jobs and that is very scary.
As I predicted in the Weekend Wrap-Up, Merkel won her election in Germany and the new “Pro-Business” coalition is making investors happy but Germany has some silly rule about balancing their budget so it will be a long time before you see the massive tax cuts that investors are salivating over. Also, one would think people would sober up and short the Euro if their plan is to start running the German printing presses in a US-styled Spendocracy but no action in the currency markets so far. I wrote some extensive commentary on the German situation in Member Chat so I won’t get into it again here.
This weekend, I also posed the questions “Are Fundamentals Making a Comeback,” or are we just resting before the next big push to 10,000? We’ll be keeping a very close eye on our 5% rule levels next week, especially the retrace levels from the 20% run-ups since early July:
| Dow | S&P | Nasdaq | NYSE | Russell | Trans | HSI | Nikkei | FTSE | DAX | |
| Fri Close | 9,665 | 1,044 | 2,091 | 6,824 | 599 | 1,932 | 21,024 | 10,266 | 5,082 | 5,581 |
| 2.5% Up | 9,950 | 1,077 | 2,160 | 7,034 | 617 | 2,001 | 21,577 | 10,808 | 5,206 | 5,745 |
| Prev Close | 9,707 | 1,051 | 2,108 | 6,862 | 602 | 1,952 | 21,051 | 10,544 | 5,079 | 5,605 |
| 2.5% Down | 9,465 | 1,025 | 2,055 | 6,691 | 587 | 1,903 | 20,524 | 10,281 | 4,952 | 5,465 |
| July Base | 8,200 | 880 | 1,750 | 5,600 | 480 | 1,650 | 17,500 | 9,200 | 4,200 | 4,600 |
| 20% Up | 9,840 | 1,056 | 2,100 | 6,720 | 576 | 1,980 | 21,000 | 11,040 | 5,040 | 5,520 |
| Retrace | 9,512 | 1,020 | 2,030 | 6,496 | 556 | 1,914 | 20,300 | 10,672 | 4,872 | 5,336 |
We can see from the chart that only the Nikkei has blown it’s retrace level but they have also never hit their 20% level. All the other indexes have hit 20% up and the Hang Seng is in the most immediate danger of giving it back but the NYSE and Russell are playing it close to the bone while hitting the 2.5% line off Thursday’s close would put most of the indexes under the 20% mark so we are a small slip away from a very red chart.
The DAX should do well today as Merkel won her election (stability is good)
It’s going to be a race between those retrace levels turning red or the 20% up levels turning green but if they can’t get the Nikkei to join the party (and that’s a tough trick with the dollar down at 89 Yen) then it’s not likely the other indexes will be able to gain much momentum. If oil fails $65, that sector has a long way to fall and metals and miners are also teetering on the verge of a correction so many, many things that can go wrong next week with lots of data on deck including Tuesday’s Case-Shiller Index and Consumer Confidence Survey ahead of the bell, our final Q2 GDP (-1%) on Wednesday with ADP Employment and the Chicago PMI. Thursday is the very dangerous Personal Income and Spending along with Jobless Claims, ISM, Construction Spending, Pending Home Sales and Auto Sales. Friday is our Non-Farm Payroll Report along with August Factory Orders – busy, busy…
We also have earnings from PBG, WAG, DRI, JBL, NKE, ZZ, WOR, STZ, BLUD, MU and Cramer’s TSCM, which will be interesting to me anyway…. So we’d better rest up, things are sure going to be interesting
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