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Goldata Financial
Dedicated to above average returns in the stock market.
STOCK MARKET COMMENTARY
November 23,
2009
From Elliot
Goldberg, Registered Investment Advisor, Goldata
Financial
Last week, the technical fight over 1,100 on S&P 500 continued for a
second week. Bulls sprinted over this threshold early on, tripping the
buy-stops of the shorts, but by late in the week, tepid volume and bearish
fundamental news disallowed the bulls from planting their flag north of
1,100, resulting in a basically flat result for the week. The bears drew some
solace from Wednesday’s inflation numbers that were a little hotter
than expected (CPI of 3% vs. 2% expected) which insinuated that the Fed would
have to raise rates earlier than planned to fight the dreaded inflation
dragon (no way). Housing and employment data continue to be negative with Bob
Toll of Toll Brothers warning that “FHA (our current cheap, low
down-payment Federal program) is the next subprime.” In spite of these
headlines, the bulls continue to get the nod as liquidity and newfound
confidence continue to trump these and other current limp fundamentals as
each bout of selling finds liquidity-induced buyers. Treasury Secretary
Geithner appeared before Congress and created great theatre by having the
audacity to fight back as Texas Republicans threw one verbal punch after
another at him. Fortunately, after about 10 minutes of it, they both ran out
of fingers to point at each other for our current financial woes and it ended
with nothing being resolved. Since there was no immediate crisis to deal with
this week, the health care debate continued with the Senate introducing its
plan with all sorts of potential new ways to pay for it including increasing
Medicare payroll rates for $200k+ wage earners (wait, isn’t the
Medicare tax supposed to be used for Medicare?). The abortion issue rose to
the fore as left-minded Democrats in the House saw a potential opening to press
for their long-sought after desire to alter the financial status quo (the
Hyde amendment which disallows Federal funds to be used for abortion). This
is a raw nerve for their opponents and may be the straw that breaks the back
of this whole bad idea. There was an increased level of chatter about job
creation as it appeared that even our administration took notice of the
latest job approval ratings for President Obama coming in below 50% for the
first time. As stated here many times, an environment that makes small
business want to hire is needed and most rhetoric coming from Washington has
been unproductive at best. Game plan: No change as winners will be allowed to
run, with protection below the more sensitive 50-day moving average.
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