Labor Day Woes

For years, Labor Day weekend was a time to take a break from work and celebrate the fruits of our labor. Sadly last weekend was a time when millions of Americans wished they had a job to take a break from. If you were awake or remotely paying attention last Friday, September 2nd, The U.S. Bureau of Labor Statistics released the August 2001 jobs report and in a word - it was abysmal. The report showed that no jobs had been created in August. If this statistic was not so sad it would be laughable. What is even more telling then this report was that the prior two months had been revised down and I expect next month for the same thing to play out. The report will be revised down from zero to a negative number. There is no fudging the numbers. The jobs market is getting worse and fast. Meanwhile, the partisan politics continue. Later this week, President Obama will address a joint session of Congress to speak about the jobs issue. Whatever your political beliefs are the Republicans are already grilling President Obama on the Labor Day barbecue pit. The man has not even opened his mouth and the Republicans are saying that real problem is President Obama's failure of leadership. Zero leadership from the White House has equaled zero jobs. As I have often written I refuse to use this post as a “bully pulpit” to espouse my political beliefs but I will leave it at this – This White House seems to have no clue how the private sector works. I have often written that I see this post as a chance to help people navigate these perilous economic waters we find ourselves in. In that light I will share what I see coming in the next months ahead. While most people tried to enjoy the weekend and forget that the abysmal jobs reports by the BLS, it just portends a global economic slowdown which normal people call a recession (if you are one of the people without a job go ahead and call it what it really is – a depression). A look at the chart of the S&P below will show that we are getting set up to retest the 1101 lows.

At the close of trading in Europe, yesterday, the S&P futures were down 23 points. If we fail to hold the 1101 level of August 9th we will certainly break towards the psychologically important 1000 level. There are two things that I am sure will happen.

I feel the best way to do this is to stay long precious metals. Yesterday, Gold closed up $17.00 at $1903.00 and silver closed up marginally at $43.30. The futures are predicted to open down over 200 points on the Dow and 25 points on the S&P so I will be maintaining my long positions in gold and silver. Both silver and gold are well within their trading ranges and still have room to run to the upside. While I don't want to drone on about gold and silver for now I believe precious metals are the safe haven in this most uncertain economic storm. I will remain long GLD, PHYS, IAU, UGL, CEF, SLV, PSLV, AGQ.