Market wrap - 4:15

Another down day, and a pretty big move. So much for that late day ramp on Friday. Looking at the technicals, we have more room to the downside. See the last chart for S/R levels. One of the main topics for this continued sell-off is sovereign debt - the PIIGS or PIGS. Portugal, Italy, Spain, and Greece, and you can add in Ireland as well. Greece is on the verge of default, which will shake up the credit markets, and in turn the equity market. The chickens are coming home to roost. The entire world is de-levering, losing jobs, losing investment value. Not a pretty picture.

China is also a concern with their recent words about cutting back on lending, or requiring more capital for their banks. The talking heads have used China as, what I will call and excuse, to invest in the markets because China will pull us out of this mess. Many of our companies have exposure (470 of the S&P 500)which they claim will make these companies profitable and therefore we should invest in them. If China, which some think is a bubble ready to bust, along with not trusting their data (they are Communist after all)no longer maintains their consumpsion - who will? Us? Hardly!

We are not an exporting country any longer, that ship has sailed long ago, and we don't have enough people working in decent paying jobs, if they are working at all, to consume and buy the products we don't even make. In other words, we don't make anything, we aren't consuming anything, and our credit has ran out, which was the driver of the bubble to begin with.

The recent rally of the market from the March lows has been on Hopium - hope things will get better and production and profits will catch up with the market. It has not, the recent earnings season has proved that. We are not consuming the junk from China which affects them. Our credit has been taken away and our national debt has risen because we have printed billions of dollars trying to jump start the economy and pump money into the market (especially the banks)to make things look like they have gotten better - they have not.

Many investors have not bought into this rally since the beginning, and they shouldn't now. We have advertised 9.7 percent unemployment, 17 percent when you dig into the numbers and unofficial reports that are probably more accurate, show it at 22. That's depression level numbers. Yet we are still shipping everything we can to foreign low cost countries to be manufactured. We are still getting deeper in debt with our national budget, and our so-called leaders are still clueless, bought off, and don't give one good shit about the American worker.

I have no confidence any of these elected officials can fix what has taken years to fuck up. We are so screwed.

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