This morning, jobless claims saw their lowest levels in four and a half years, all while Wall Street Analysts are running around cutting third quarter guidance as if we're preparing for the worst numbers we've seen in years. I've got a few comments on this, as well as providing you with an interesting paradox that appears to be taking place right now. As for the economy and jobs, it's important to remember corporate America found a sweet spot to improve their bottom lines over the couple of years by actually cutting jobs and focusing on establishing better internal efficiencies, because there was no way their improving bottom lines could be attributed to higher consumer demand and a strengthening economy. If you've been reading our newsletter for a while, then you know we've been saying for a long time large corporations would eventually run out of rabbits to pull from out of their hats, and that this upcoming third quarter could be the quarter that reveals nowhere else to turn but an improving economy and an increase in consumer demand. In other words, going into 2008, our country was in a state of gluttony, productivity was low and everything was just too easy, which included borrowing. Then, reality hit center stage and all of a sudden everyone had to work hard and work smart to stay above water. Yes, that's a very broad and general statement, but I think you get the idea. Now here we are. If we can get a thriving economy, we can see another strong leg up in corporate earnings now that we've learned our lesson about efficiencies and productivity. If we can't get the economy on the mend, there's no place for corporate America to turn. We've already tapped the whole global growth opportunity thing. It almost appears we're forced to do everything now the way we've should have been doing it all along. If you put our analysis of two and two together based on all of our commentary this year, the charts are telling us we haven't seen the highs for the year yet, while the underlying fundamentals may not support higher stock prices. That's a very mixed signal. I find it interesting though that everyone, and I literally mean everyone, I've talked to in recent weeks has said this last summer and September were the absolute worst they've seen since they can remember. I'm referring to friends and colleagues in the private sector. However, every single individual I've spoken to this week, which includes five to six completely different businesses has said things have picked up dramatically in the last couple of weeks. So, with all that being said, it's quite possible analysts have cut third quarter guidance enough so as not to look stupid when companies report. By the way, I rarely pay attention to what Wall Street Analysts have to say for a number of reasons, first of which they're usually the last to the party when it comes to being right. Anyhow with the recent pullback we're seeing, it appears we're pricing in a rough quarter, however, maybe things are turning for the better and the fourth quarter would be a nice surprise to the upside. That would fit perfectly in-line with what we're seeing in the charts. I suspect as we hunt for a bottom right now, this bottom may well be a nice buying opportunity as long as signs of consumer sentiment and the economy in general start to improve. As for dealing with our astronomically growing deficit and Bernanke's highly questionable monetary policies, that's a separate issue, which could take years to unfold. This fiscal cliff he keeps pushing congress to act on will likely somehow be saved at the end of the day, at least for now. Just my opinion of course. The markets gapped up on the open this morning in an effort to relieve some of the selling pressure, but they're currently backing and filling, so it remains to be seen if the absolute bottom is in place. Since bad news has recently been priced in, and we're right around logical support levels, I suspect we're forming at least a short-term bottom right around current levels. Worst case scenario, I've included a weekly chart of the NASDAQ Comp. here showing you the complete 3/8 retracement level from the summer low to this year's high. You can see we're right around that level now, so a bounce would be in order. Whether or not we get follow through is the big question which will tell us more than anything else. The longer this week's weekly bar gets to the downside, the uglier that makes the prospect for a bullish bias on the weekly charts. Is Sprint Getting Soft? Japanese mobile carrier Softbank Corp is in talks to buy a majority stake in U.S. operator Sprint Nextel Corp for more than 1 trillion yen ($12.8 billion), according to a source with direct knowledge of the matter, adding yet another potential shake-up to the fast-changing U.S. wireless market. In response to reports of a pending deal, Sprint said on Thursday that it was in talks with Softbank on a "potential substantial investment" that could involve a change in control of the company. It said there was no assurance of a sale. A deal would give Sprint a much-needed partner with deep pockets whose backing would lower the company's cost of capital, analysts said. On the other side, Softbank would get the entry point to the U.S. market it has sought for months, which could help it counter stagnating growth in Japan. That's good for all of us, eh? We suggested Sprint (S) back in mid-July at $3.67 per share, and updated SCN Members just last week suggesting the merger news between T-Mobile and Metro PCS was a perfect reason to technically correct a large run-up in Sprint, thus allowing bigger players to accumulate and/or enter into the stock. We also mentioned we suspected shares of Sprint had yet to see their best days and the closer it got to $4.42, the better buy the stock was. Since then, shares of Sprint pulled back to a low of roughly $4.75 before popping again to a high this morning of $6.80, which put our overall return in the idea at 85% since mid-July. How do you like that?! We're not overly hyperactive with ideas, we don't run around suggesting every small cap or penny play on earth, but when we do... SCN Members should listen. Doesn't that sound like a Dos Equis commercial? Sorry, it's my single most favorite commercial campaign in history. Is it possible we are the most interesting men in the financial world? Ok, maybe that's a stretch. Stay tuned. Bottoms are formed not made. Once we believe a bottom has formed, we'll be bringing you more small cap plays because there's nothing better than a good small cap idea with the major indexes bullishly trending higher. Lastly, I cannot wait for tonight's debate, this is going to be a real doozy, rest assured.