SP Futures Hourly Chart at 2:30 PM

The Jobs Number today was a horror show, not so much for the 'headline number' which is routinely manipulated, but rather in the utterly cynical, almost Orwellian, of the January number down to a breath-taking low.

The Obama Administration did this as part of an effort to spin 'a bottom.'

Is there a V bottom in the making? Is this a legitimate rally in equities?

We don't think it is, at least in terms of the economy. The indicators continue to deteriorate badly.

But we need to be aware of the possibility of an attempt to reflate the asset bubble, and this will show up in equities first, with a possible deflation in the Treasury bubble as hot money moves from relative safety to risk.

Everything about this market, and our economy, is directed by expediency rather than principle, and is therefore short term in its goals and outlook.

Having said all this, the market is overbought and the rally overextended. It may get more overbought and overextended, as we saw in the market 'recovery' of 2004-6 in which the US equity indices were managed up to new highs, even while the rot in the real economy spread, crumbling the foundations of wealth.

It is hard to comment on this market, because the Obama Administration is a profound disappointment, to the extent now that our short term optimism and confidence has dissipated.

If Democrats were trying to create a new Weimar Republic it would be hard to imagine a more sincere and effective effort. The problem is that the shadow of what comes next looms over the world like a dark cloud of misery brought about by the madness of men.