Here is the latest Dow Jones seasonal forecast, using the latest data. Seems that the market is correlating to a bullish interest rate environment, namely a lowering of interest rates, but also is more correlated to a bear market seasonal than bull market seasonal. Even so, all the factor seasonals show a small blip up right about now that usually lasts for a week or so.
The employment figures coming out Friday may change things, but the market has already pretty much digested the results of the G20 summit in Canada with governments promising to cut budget deficits over the next few years. That can only mean two things: higher taxes and less spending on entitlements. We agree with Krugman–if they go through with this, it will eventually produce a double dip recession at the least.
