(Editor's Note: Paul Schatz, President of Heritage Capital, LLC, in Woodbridge, will be contributing to Fi$callyFit every Friday. Read his biography here)
The sovereign debt crisis in Europe is percolating again with Greece, Ireland and Spain teetering. Last Friday's employment report, as you can see below, showed very few jobs being created in May with unemployment ticking slightly higher again. As I have mentioned before, if this was a normal recovery, job growth would be soaring right about now. Since mid 2010, we are more like hovering.
Bernanke & Company's QEII, which pumped $600B into the system will be ending in a few short weeks. And the S&P Case Shiller Index of home prices just hit an eight year low. Yes, you read that right. Home prices, except the ones we are trying to buy, continue to make post crisis new lows and are back to levels not seen since 2002 and 2003.
If you add in the somewhat extreme nature of the selling wave along with the surge in investors buying protective put options and newsletter writers more bearish than bullish for five consecutive weeks, you have all the makings for at least a short-term low. I am going to stick my neck out and say that the bottom is not in place yet and will likely need one more selling wave to hammer in.