Some have predicted a
“Zombie Summer” which might be right as investors await proof that a real economic recovery is in the offing. But, just when you thought they might break this camp job they’ve been working on we got the obligatory “stick save” into the close.
Evidently job losses were “worse than expected” and some noted bulls thought the market was expensive which is pretty funny since most of the financial media still report PEs incorrectly. Bloomberg, which should know better, has PEs at 15 for the S&P 500 by using operating earnings which omits unusual items (losses and writedowns?) making stocks look cheaper than they are if just using GAAP trailing earnings. The latter would put PEs at astronomical levels greater than 30. So as things go it’s however TPTB want to spin it.
Volume continues to be light and breadth today was negative.
I usually just post the above chart that measure ultra-short-term conditions. You might find the longer-term “Summation Index” more meaningful. As you can see it’s overbought at over 1000.
The market’s behavior and dishonesty have turned the usually cheery Fryguy into a downright cynic. Whether it’s phony PEs, government data, blatant manipulation, and lying from authorities I can only say we deserve better. Below is an apt summation from another cited blogger regarding the ADP report specifically and current conditions in general.
“The ADP report is supposed to be based on actual reports from private industry.
This pervasive pattern of 'good numbers' that result in stock market rallies and the massaging of public opinion, only to be replaced by downward revisions thirty days later, with little notice or quote, is cynical manipulation of the media at best, and a dangerous slide into social engineering by an increasing distortion of 'reality' at worst.”
Jesse’s Café Americain
I may not post tomorrow deferring to Friday’s unemployment numbers and reaction to them.
Let’s see what happens next.
