Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Testing Resistance

The markets gained traction today on technical oversold conditions and improved ISM index numbers suggesting manufacturing data is validating the expected recovery.

Market values pushed back up to benchmarks identified as previous support levels - 2200 for the NASDAQ, 1100 for the SPX, and 10,200 for the DJIA.  The question remains whether or not today's move can provide momentum for values to invalidate the above benchmarks as resistance. 

Fact, the us economy is made up two thirds of consumer spending and the majority of business is service related.  The expansion in manufacturing is therefore somewhat misleading as the numbers reflect only a small portion of the economy.  Sure, improved manufacturing data can give us some insight on economic conditions, but they need to be put into context of the entire picture and frankly the whole picture remains suspect and uncertain.

Obama release his budget proposal of this year.  3.82 trillion dollars worth of spending.  At this pace the national debt will double in 5 years and this years deficit will exceed last years.  Interestingly enough, his words do not match his action.  Obama's words say to cut spending and reduce the deficit, yet his actions are the exact opposite.  It would be nice if we as individuals could do the same, to increase our debt ceiling and spend money we don't have without any consequence.  The fact is that eventually the "roosters will come home to roost" (where have we heard that before) and the bad news will be a significant negative impact on consumers and taxpayers.

Summary:  Buying today reflects what some see as buying opportunity in a down cycle, but does not indicate the current correction is over.  Look to fundamental events more importantly employment data, because the truth will lie in private sector job loss or creation.