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Scopelabs Insight – Friday, December 4, 2009

|Includes: AAPL, Bank of America Corporation (BAC), GS, MER, MS

On Thursday, December 3, 2009, the Dow closed down -86.53 coming in at 10,366.15 as the S&P 500 gave up -9.32 to close at 1,099.92. It seems the 50% retracement resistance of 1,121 on the S&P remains intact, for now.

As I watch the markets continue to side-slip at what would appear to be a resistance level on both the Dow and S&P 500, I have to wonder where the unemployment numbers factor into this whole smokescreen. If you believe the Bureau of Labor Statistics, jobless claims just fell for the fifth week in a row. That’s great. Oh but wait, the holidays are here and retailers, even in this environment are staffing up (maybe not as much as in the bubble years) for the Christmas spending orgy, which might explain the softer jobless claims. So we’ve got that going for us. On the flip-side if you go to and look at real unemployment already over 20% it makes you want to go down to the local Federal Reserve branch and start knocking some heads around. We’re in a bad spot sheeple. And it’s going to get worse. Trust me. I haven’t been wrong so far.

The fact is that unemployment far exceeds what the media and government portray and even THEY admit it’s going to get worse in 2010. Hooray for the jobless recovery though! Maybe we should all go out and buy up as many stocks as we can. Goldman can pay their bonuses. GM can rise from the grave and Ben Bernanke will look like a hero as he exports inflation all around the globe. On the other hand, how about we don’t do any of those things. How about we do the exact opposite and protect our assets from lies and fraud. Taking that one step further it is a safe bet that we WILL in fact get hit to the downside again at some point – we’re just NOT sure when, hence the LONG dated and small bets on the puts suggested in earlier Insights. There is NOT a rule (unless you are being forced to, like they are trying to force you right now with Zero Percent interest rates) that says you HAVE to “play” when the conditions are NOT favorable from risk-reward standpoint. Remember, “this isnt baseball, you dont have to swing at every pitch! You can easily stand with the bat on your shoulder and wait for a fat pitch”

Disclosure: Short gold