Between yesterday and todays market action, I’m becoming more and more encouraged that we’re getting closer to the bottom of the market fallout. I’m not sure why I feel that way, because another part of me feels that another shoe may drop, and we’ll be in for another decline.

I heard a comment recently on the radio that there has never been a recession in an election year, mostly due to the fact that those running for re-election become more focused on the needs of the people they represent (i.e. the economy) as those are the people that elect them. Not sure how true that is, but I think that’s a rather general statistic and, after all, all records are broken at some point in time.

By in large, our credit crises has yet to filter in to commercial real estate, and I think it will to some extent. What effect that trend has on the overall stock market is yet to be seen.

There is a lot of money being reinvested back into the stock market today, and I’m curious to see if that trend continues over the next couple days.

My good buddy Winston told me that we’ll know we’ve found the bottom of the stock market decline when the volatility (VIX) spikes to around 30 or so. I’d like to know the rational behind that statement, but in the last five days the volatility has been up quite a bit.

Economics, Investing markets, recession, volatility

It seems the sentiment on the trading floor is that oil is going higher. Scott Hess, is an crude trader on the Nymex, and if his outlook bears any fruit, oil is going higher.

Energy commodities, crude oil, markets

Today an employment report revealed that seasonally adjusted nonfarm payrolls rose by 18,000 in December, the weakest job growth since August 2003. On top of that, private-sector payrolls fell by 13,000, the first decline in more than four years.

Most economists, as well as the market, were expecting payrolls to increase about 58,000 in December.

I view this as a sign that the economy is starting to falter. Housing is in toilets, unemployment is rising, consumer spending is in limbo, gas prices are high and going higher, and to cap it all off, our credit cards are maxed out (and by “we” I mean Americans in general).

It doesn’t help that the Fed is lowering interest rates either.

Welcome to a recession!

To be clear, I don’t think this is a bad thing at all. Let’s face it, the cyclical stock market can only go up for so long before the economic cycle comes full circle.

I think the economy is at the top of the roller coaster, and the first couple cars have gone over the crest of the hill.

View this as a great buying opportunity for stocks that have been dragged down by the overall market, but are overall very healthy and well run. Now is the time to be in cash, and to be very picky about the stocks you buy.

Economics, Investing, Market Trends Economics, jobs report, markets, recession