Short Term Trading Member Forum

[techcharter]

ABX Index DOWN, Jobless Claims UP

This is the second consecutive day this ABX index has been down. Today the selloff accelerated. The last time I wrote about the ABX index it was that it lagged the equity market turn. Now it may be back to leading the equities.

http://www.markit.com/information/products/category/indices/abx.html

ABX.HE.AAA.06-1


Eventually fundamentals align with the market. Today was a whopping 740K initial jobless claims. The chart is nearly vertical. There is no way the markets are predicting a turnaround in the economy 6 months from now. 2.5 million people have lost their jobs in the last month alone. At $50K apiece, that's $125 Billion in lost income. The effect is worse if you consider a $10 K payout apiece of unemployment insurance ( $25 B increased burden to those employed ). 6-12 months down the road. The consumer just isn't ready to recover when funds are being reduced or cut off. MEOW this is just a dead cat bounce in the markets. Get ready to go short again.

http://www.bullandbearwise.com/InitialJoblessChart.asp