Don’t buy now, buy after the pull back.

The Re spiral method that uses the MACD and the Parabolic SAR has indicated that the next pullback will be a buying opportunity.

This will not be a normal recovery. This recovery depends on fiscal spending for stimulation, FED monetary policy for anti-inflation measures, plus a new massive printing of money because China and Japan will not buy all debt the US needs to shed in the process. Zero FED interest rate will not stimulate purchases of US debt so they are now printing money to provide the additional money to spend. The Europeans refuse to do the same so that means US currency will come under repeated devastating attacks. Each attack will disrupt trade and cause unpredictable changes in exchange rates that will result is large destabilizing losses and gains that depend on when the exchanges occur. For the first time we will see large international companies brought to their knees as mistakes are made. There will be large swings in the values of equities, price inflation to hedge against currency losses and bonds will be under periodic and accelerating attack. A currency storm is brewing.

We believe we probably have seen the stock market lows but we will likely see them two or three more times before the world economies settle and recover. And when the recovery occurs we will see high taxes on hydrocarbons and a lot fewer automobiles on the road.


Market forces

Cash flow was again slightly positive into the markets Friday. The media is not reporting the truth on volume. As we have said before, three of the US market indices publish identical volumes which we have found to be fabricated and anybody who knows anything knows those volumes have been incorrect since early 2005. Volume is not high as they indicate. The actual volume during the recent rally has been average to disappointing. The rally volume and cash flow has been weak and over hyped.

Obama socialist threaten publicly to replace many bank executives with Democrat Socialist political hacks to channel more taxpayer cash handouts into Democrat-socialist campaign coffers.


Market Outlook

All the signs are saying this rally is over and it failed to set a new high by margins of 2% to 11%

Friday’s surge was again on average volume. It did however put the Parabolic SAR and MACD back in a countdown towards a buying opportunity on the next decline. The last decline was preceded by an outright sell because as Jim Cramer pointed out… the Obama administration had been ignorant of economics. Now the Obama administration is more knowledgeable so the Obama market collapse seems to be over for the moment. However the battle for a recovery has not even started. The stimulation package hasn’t even started and will not be up to full speed until the next election year in 2010. That is when the currency crisis will be getting up to full disruption too.

Asian shares were positive last night with Shanghai (China) closed, India up 1.8%, Japan up 1.2% and Hong Kong up 3.1%. Asian markets did not have as severe a collapse in February as US markets had due to Administration exhibitions of ignorance. Therefore the Asian rallies have set new highs above their January highs. They continue to lead the world markets. But they will become erratic when the currency storm arrives.

European markets are currently up in the range of 0.3% to 0.7% mid way through their day today.

US futures indicate the DJI will be flat at the start today. All the American equities markets are extremely over bought... as overbought now as they were oversold four weeks ago at the lowest point in twelve years. All the US markets are near their January highs and strong resistance levels.

It is expected that earnings reports will now be dismal but the media spin will be positive. The economy is now expected to decline well into early 2010 but it is clear that the market psychology is improving even though the economic news of the rate of economic decline is still accelerating. We believe we have seen the stock market bottom but this is still a trader’s market and we expect to see this bottom again and again at the most unpredictable times similar to as occurred between 1973 and 1982.

Government corruption under the socialists is a cause of a growing crisis of confidence in Obama’s economic policy which seems to be the redistribution of wealth into Washington politician’s pocket books not the poor.