Morning Update: Market Thread 7-1-2009

Welcome to the second half of the year 2009. You know, the time when the greenshoot crowd believes we will climb out of recession and back into never ending growth bliss. Oh my… just keep in mind that the same people forecasting such nonsense are the very same ones who saw nothing wrong with the economy in the first place.

And they’re likely the same ones donating their client’s money, er, I mean buying up equities over night to keep the market afloat. Or would that be the government surrogates doing the buying with your debt obligations? Alas, like a patient riddled with lung cancer, one more cigarette isn’t really going to make a difference, is it?

And how did the roller coaster ride that was the first half of 2009 fare in the market place?

Well, the S&P 500 actually was manipulated into a 1.8% gain, the DOW “Industrials” finished down 3.8%, the Transports lost 8.6%, the NDX gained 21.9%, Oil is only up 58%, gold gained 4.9%, IYR lost 10.3% (SRS designed to gain twice what IYR lost went DOWN 63% – so much for buy and hold inverse ETFs!), and TLT (long bonds) which just rallied 10% in the past two weeks still was down 20.3%.

And just this morning we have 3 separate but ridiculous private employment reports. The Monster Employment Report fell from an index value of 118 to 117; the ADP report revised the number of unemployed downward in May and says that private payrolls contracted by “only” 473,000 in June, down from May’s revised 485,000; and finally there’s the Challenger Jobs report that tracks mass layoffs… guess which category is kicking into high gear? Government! But they too show that mass layoffs are falling from May’s 111,000 to June’s 74,000. Yet more “less bad” for the CNBC crowd and the moronic Dennis Kneale.

At 10 Eastern this morning we’ll get some semi-real data with the ISM Manufacturing Index, Pending home sales, and Construction Spending as well. Tomorrow, of course, is the BLS reported employment situation which I believe is being estimated to be better than it will turn out – we’ll see.

Yesterday’s decline was set to be quite nasty from a technical perspective. If the last hour pump hadn’t come it would have been a key reversal day, but the tape was sent higher from the day’s lows. Still, the SPX did engulf the body of the candle from the up day prior, and volumes were heavier on the down day. It was looking like it was the start of wave 3 of 3 down, but that count is still tenuous. If it’s in play, then we are working on wave 2 of 3 of 3 now.

The 10 minute stochastics are overbought and say that some near term decline is possible, while the 30 and 60 minute reached oversold yesterday and say that further bounce is in the cards today. I think the 10:00 reports will be influential, that should help provide clues to the real working count.

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