Obama dream team

This weekend Obama passed with flying colors.

President Elect Obama seems to have begun to act like the next president with effective actions and hope replacing previous weeks of vapid change monologues and economic fear finger pointing.

Lame duck president Bush has now become calculatingly negative but no one listens to him any more. This weekend at the Asian Economic Summit he said protectionism leads to the "D" word. This is something everyone in the room learned in third grade and was the first time he was broadly reported using the "D" word. Usually he is more responsible. If he sticks his foot in his mouth again like that... then President Elect Obama can ram it down his throat and say President Bush's white knuckled fear mongering is hurting America. It is time for these leaders to put up or shut up and stop trying to always blame someone else or terrorize the financial community just to seem more important and powerful than others.

The bailout of the incompetent management of Citicorp would normally mean a down day for the economic markets today but the new leadership and positivism of President Elect Obama and his dream team may wash away that bad news.

Japan is the fragile canary we use to test if the air in the financial coalmines is fit to breathe. Japan's market faltered first last year and led us down into this bear market. Now Japan seems to be showing evidence of having completed a market bottom. Most European markets are now giving ambiguous signals due to the high volatility, but Asian markets seem to be more accustomed to the volatility and are showing a better indication that the market bottom has now been established.

Today we will see if the failure of the lower resistance levels in American and European markets last week was a classic head fake to shake out the last of the panic sellers. Anyone with a brain now would be hesitant to short this market with equity values now at historic highs putting the risk of an earth shaking rally at an all time high.

We estimate that a rally now could easily extend to between 25% and 30% in its first spike-up and beautify and perfume the current dismal fund results heading into the year-end fund reporting period. And we have the recent calm measured and intelligent leadership of President Elect Obama to thank for a more positive national outlook. That market rise is consistent to a rise to the traditional 200 day moving average resistance level and as large as it seems it would still be a bear market. A bull market would have the the lower not the upper resistance level at the 200 day moving average resistance level.