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November 5, 2010 – 6:08 pm

This morning the government reported October job numbers which showed a surprisingly strong growth in the U.S. of 151,000. The expectation was for about half that. The market’s reaction was muted, something that shouldn’t be too surprising since we had a very strong day yesterday.

Though this report was a pleasant surprise it did not reduce the unemployment rate which is still well over 9%. Also, unemployment claims rose by a strong 20,000 this week. The job market is still very weak, but you have to say it is improving.

The market is overbought and is due for a small pullback but there is no way to determine when that might happen. As an investor you should not react to it other than using it as an opportunity to add to your positions. The strong run up in prices for the last two months is a reflection of improving earnings and economy. The pace of earnings is much stronger than the pace of the recovery in the economy but investors are more interested in direction and that appears to be improving.

Good Trading
Steve Peasley

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