Major averages fell yesterday on higher volume. The S&P 500 closed below its 200-day moving average, a key line of support. This brings a potential move by the S&P 500 down to its 50-day moving average into play, which could coincide with the NASDAQ Composite pulling into its own 200-day line. Investors should remain alert to where their stops are on any long positions and prepared to take defensive action if necessary. Futures are currently trading lower as oil demand is projected to slow worldwide in 2016 and the Eurozone's Q3 GDP came in at 0.3% vs. an expected 0.4%.
With respect to the believability of the 5.0% unemployment rate, the labor participation rate has not been this low since 1978 suggesting that many have given up looking for work. The decline in labor participation peaked in 2001 during the recession then accelerated after 2008. So much for quantitative easing.
And with regards to falsified statistics such as the CPI, since everything is indexed to CPI, if government figures out ways to manipulate the CPI lower, they can more easily cut benefits.
Thus we live in a world characterized by the Orwellian paradox of government officials touting an "improving" economy while continuing to keep interest rates near zero.
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