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At 623,000 this week’s initial jobless claims came in 8,000 less than the last week (last week was revised up by 5,000 to 631,000) and 15,500 above the 4 week moving average.

While this nudges up the moving average, I don’t think it provided the kind of shock that the US Financial system really needs. A horrendous number relative to the already sufficiently bearish expectations out there is what we need to break the US Dollar. Until we get that, the US Dollar is going to continue on the path of least resistance – higher.

Today the US$ Index us up another 50 basis points to $86.24, hammering home the same inverse correlation that has held steady for the better part of 2009 – US$ up = stocks down. This equity market continues to be worried about her government’s credibility. A Crisis in Credibility leads people to hoard cash and gold – that’s what people do when they don’t trust the system.

Keith R. McCullough
CEO / Chief Investment Officer