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Goldata Financial
Dedicated to above average returns in the stock market.
STOCK MARKET COMMENTARY
September 8,
2009
From Elliot
Goldberg, Registered Investment Advisor, Goldata
Financial
Last week, the new pattern of selling the
rallies continued. Monday opened with the Japanese electing a new government
promising change (sound familiar?) It seems even the stoic Japanese had had enough
of the governmental sclerosis that has led to a no growth economy and
corruption that has existed there for the last few decades. Their market
opened 2% higher, but finished flat confirming that the “sell the
rally” mentality was global. Tuesday brought an impressive
manufacturing report which rallied the markets early, but, you guessed it,
selling shortly ensued and the averages were down over 2% on large volume
(not a good thing). The Wednesday
before the Friday monthly unemployment report brought ADP’s best
estimate for job losses for the previous month based on their payroll data. A
higher than expected number created more selling, in spite of a productivity
number of historically high proportions. It seems that businesses have figured
out how to produce more with less people and, guess what? If the government
continues to make it more expensive to hire people (minimum wage hikes,
mandatory fees for health insurance…) this number will continue to rise
and unemployment will continue to grow. Thursday’s market was docile until
about an hour before the close when they rallied them into the close for
about a 0.5% gain in spite of the unemployment report coming pre-market the
next day. Conspiracy theorists had plenty of ammunition when the unemployment
number came in better than expected although the unemployment rate rose to 9.7%, the highest rate since before my
children were born (the oldest is 24). Gold spiked and no one could put their
finger on why (including me). Explanations ran from less hedging by gold
miners to something nasty coming (a la 9/11). There were some positions in
gold in some managed accounts which boosted performance, so quibbling will be
kept to a minimum. On the Washington scene, a report was released Thursday
saying that regulators were intimidated by Bernie Madoff
and that is the reason they did not dig deeper into his shenanigans. Just how
are the government-solution minded going to deal with that problem? Folks,
you can have all the regulators you want, but it’s a lot easier when
the government provides the right incentives and gets out of the way, rather
than counting on them for “protection”. Conclusion: This market
is playing nicely into our current strategy of moving up stops on spikes and
locking in gains. Given a certain uneasiness with gold’s activity, I am
quite comfortable in continuing this somewhat defensive stance, yet letting
them run if my concern is not confirmed.
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