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Ready To Fight Back?

|Includes: Apple Inc. (AAPL), NKE
A session like yesterday was overdue, and for me not a big deal per se. Heck, in some respects I like sessions that test the will of investors. Of course, most investors have glass jaws these days and often fall over at the slightest faint. I mean the stock market and mixed martial arts can't be confused for one another. Investors go down for the count real fast, no need to pound them in the head with repeated shots. In all fairness, ten years of pounding has given most investors cauliflower ear, eyes, nose, face, neck, back, chin, and every other body part.

So, after being treated like a Rock'em Sock'em robot, it's no wonder investors have no fortitude.

I will say that investors, while vulnerable, aren't running for the hills anymore, rather just jumping out of the ring. But this is good stuff. When investors hang tough and weather a tidal wave of punches and fight back it will be a huge buy signal. It doesn't happen at lows, but after major upside moves. That makes the next few sessions critical. No, it will not be the end of the world if the market stumbles and is counted out again. It would be just another trip to Palooka-Ville, no big deal, right? But, this is a golden opportunity. If investors fight back the market could surge from here. Investors just have to decide if they will stick their necks out rather than have them punched off their shoulder.

The market is seeking leadership in industry and in politics.

Individual stocks like Apple (NASDAQ:AAPL) don't have coattails, and while cloud computing is hot, the names in the space that are moving are seen as acquisition candidates not leaders. I think that is part of the problem. There are no young upstarts outside of Facebook, which isn't publicly traded, that has captured the imagination of the causal market observer. It's those casual observers that are sitting on the fence, waiting for a reason to chase stocks. The good news is there are big names that are executing, including Nike (NYSE:NKE), which posted earnings that beat consensus by $0.13 after the close. Again, it's a unique play with one real rival in the entire world.
Job Trends

Then there are the trends. Job trends are deteriorating. All week long things from initial jobless claims to individual state unemployment data have suggested we must brace for bad news on upcoming jobs data. Yesterday, mass layoff initial claims saw fewer employers release 50 employees or more, but the total amount that had to file for initial jobless claims increased to the highest level since May. Right now, the nation is at half the level of mass layoff activity as the worst month during the Great Recession, but once again we are heading in the wrong direction. More alarming is manufacturing, which has seen the number of mass laid off workers more than double from May of this year.

And a real curiosity is the continued surge in laid off teachers. I just don't get it. All the money from the stimulus bill, and more recently the teacher bailout bill, and still elementary and secondary teachers are biting the bullet at the fastest clip ever. In August, 4,093 teachers filed for initial jobless claims, a record.

Neil Barofsky says GM's stock has to rally to $133.78 a share without splits for taxpayers to breakeven. The IPO will be lowered to something like $8.0 billion to $10.0 billion from the more ambitious $16.0 billion talked about last month.