This rally needs to grow legs this week

Market Outlook

The broader market indices held putting in what could be a double bottom. The recent stock market behavior could support a major advance if it continues upward this week. The oversold American stock markets rebounded yesterday and the futures were soaring minutes ago but they are dropping even faster now. It looks like more chaos ahead plus another Bernacke speech today. “It is often better to keep one’s mouth shut and appear to be a fool than to open it and remove all doubt.” But lately Bernacke is looking very good when compared with the Obama administration.

Last night Asian markets were up with China up 0.3%, India up 0.9% and Japan up 2.7%. Hong Kong was up 1.6%.

China actually bottomed November 4 at 2201 and is now up 30%. Hong Kong is today up 18% from its November Low. Evan Japan is up 17% from its November low. In contrast the broader American indices are at their November lows.

There is 30% to 40% headroom for this American market to rally before hitting substantial upside resistance level. However the 50 day moving average could be a new resistance level limiting the advance to 15%. Of course under democrat-socialism fundamentals there is no predictable market bottom.

As we have reported before in a virtual countdown… the window for selling out of equities started closing January 20 and is almost shut now. Only a continued surge this week would crack the window open further and make continued holding of any equities worth while according to our technical analysis. This week is critical.

At this moment most European markets are up about 1% on average. But socialist Europe is all down and still declining from November 2008 levels.


President Obama spoke:

The president’s message last night apparently informed the more informed Americans that Obama doesn’t really care about the American economy but he cares about his power base and government socialism.

1) He is going to double the number of windmills and solar panels instead of making America energy independent with nuclear power. His advisor Warren Buffet no longer thinks that makes any economic sense and Warren now himself recommends nuclear power. Obama is going to make America the producer of electric cars and electric batteries but Americans won’t be able to charge them until we have sufficient electric power. That requires nuclear power. That is his energy policy which will fail and make American automobile ownership too expensive and will encourage mass transit as in socialized Europe.

2) He is going to help strapped taxpayers subsidize college union teacher’s salaries by giving a tax credit to offset the cost of some of professor perks. The local school teacher’s unions will get their money directly through the state stimulation packages. That is his socialized education policy which will is designed to make states dependent on central government subsidies and eventually state control of education as in socialized Europe.

3) He is going to scrap American human experimental cancer research into new medicines and spend less money instead trying to first find a cure for cancer in laboratory rats. He is going to get rid of doctors who are specialists and have unionized general practitioners like they have under socialism in Europe. In France the local doctors publish the days they plan to be on strike each week so that it is not an inconvenience and so the French know not to get sick those days. That is his American dream version of the European socialized health plans.

To do all of this President Obama adds that he will save 1$Trillion by moving the war on terrorism back to American soil where he thinks it belongs and where it costs less money to fight. He has computed and plans to show in future budgets that the destruction of the twin towers in NYC (in just two hours) actually cost Americans less in dollars and slightly less in lives than fighting terrorists in their back yard in the Mid East (for the last 6 years). However, Obama seems to hate Wall Street somewhat less than the terrorists hate it. Little of this savings from bringing terrorism home to America will actually go to build our infrastructure but is instead designed to put money in the pockets of people who support Democrat-Socialism by giving supporters cash, administrative paper pushing jobs and task forces to work on.

The stimulation package is designed to tax the portion of the population that is willing to carry the water and to grow the portion of the American population that wants to just sit there and drink it. That is how Democrat-Socialists plan to win elections.

One thing is absolutely certain; in the future the people who work for a living will no longer be stupid enough to contribute to the campaigns of Democrat-Socialist so the socialist will have to add a new priority to their list namely,

Priority 3) Limit opposition campaign spending with a spending cap below what unions and government workers can support.

The others are:
1) Suppress religious freedom and moral judgment by defining it as “hate speech”
2) Curb free speech criticism by imposing a “fairness doctrine” to make it economically impossible to air free speech by forcing equal time for dull socialists who can't find anyone willing to listen.