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Goldata Financial
Dedicated to above average returns in the stock market.
STOCK MARKET COMMENTARY
July 6, 2009
From Elliot
Goldberg, Registered Investment Advisor, Goldata
Financial
Last week, light, pre-holiday trading kept the
averages near breakeven until Thursday’s employment report, which
disappointed bulls and drove market averages down. Nonetheless, the week was
not without reportable items. Fundamentally, economic news from China continued
to be positive as their latest PMI report was impressive. Technically, we
bumped up against SPX 930 a few times without being able to break through. As
a result, a bearish, reverse head and shoulders pattern is potentially
emerging, but must be held in abeyance as the volume was light. In the
“and justice for all” department, the Supreme Court decided that
skills do count, even for government-based jobs, when they ruled that the
scores of some white New Haven firefighters that scored higher than non-whites
on a pre-approved exam will stand as opposed to throwing out the results and,
in essence, trying to fill those slots based on racial quotas. This is
especially interesting as our latest Supreme nominee, Sonia Sotomayor, ruled against these white firefighters in a
previous round a few years earlier. Note to Sonia -- Since we already have a
women on the Supreme Court, why not step aside, in the interest of racial
equality, as there are a plethora of other minorities currently
unrepresented? California’s financial woes continued to boil to the top
of worries as the state failed to pass a budget (near miss -- $26 billion).
Strapped with not being able to print its own money, (fortunately, our
Congress is not so handicapped) it’s done the next best thing --- it is
issuing IOU’s (please explain the difference to me). For those who
still feel that government and regulation are the answer, two interesting
tidbits --- 1) The Wall Street Journal reported that Congress is now spending
ten (10) times as much for overseas travel (on our dime) as it was in
1995. 2) An SEC compliance
officer, Eric Swanson, met, fell in love and eventually married the niece of
Bernie Madoff, Shana Madoff.
Over the years, multiple complaints to the SEC against Madoff
were closed without finding problems and this week, reports surfaced he told his
subordinates to look the other way. Next week brings Treasury auctions of $73
billion (drop in the bucket) and the beginning of earnings season. Alcoa (AA)
will lead us off and try to extend its streak of earnings misses. Conclusion:
The market continues to digest gains from the second quarter. The “two
steps up, one step down” theory would point to the continuation of the
correction in the near term, but should not be terrible. With some positive
light from earnings reports, we should move higher as the summer progresses.
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