Rate of economic decline is still too steep for a market bottom to form.

The economy is not in a depression type accelerating downward spiral as socialists hoped for, but their fear mongering last year and up through February of this year did come close to creating the depression spiral collapse they seemingly wanted. But too many people understood what damage the “democrat socialists” were doing and bankers and corporations learned quickly to resist. Unfortunately some auto companies and bankers took the socialist's poisoned bait and they are now failing or already no longer with us. A few like Goldman Sachs and Bank of America were poisoned but are pumping their stomachs as fast as possible and probably will recover by returning the TARP nationalization cyanide.

The rally in March occurred because the pressure caused by so many “democrat socialist” tax cheats being appointed to cabinet and economic czar positions, ACORN voter registration fraud, Al Gore solar investment fraud schemes, obvious voter fraud by Al Franken supporters, Congress voting $millions for AIG bonuses in their pork bankruptcy stimulation package (and then denying the fact), and outrage with ACORN and White House attempts to silence the free speech of American airwaves (fairness doctrine) and the secret election ballot (card check)... all forced the Obama Administration to stop its extreme fear mongering.

The rally that just ended is the recovered future cost of Obama’s past fear mongering. If he starts up again the bottom will fall out of the stock market again. We have one of those suicide Japanese pilots at the wheel of the American economic flying machine and this ride he is giving the American economy could be very bumpy. The good thing is the entire “democrat congress” will likely be voted out of office in 2010 and then we can fly then on autopilot until 2012.


Market forces

Cash flow was out of the markets yesterday for the first time in over a week. The last day of the fund’s quarter report gains was yesterday and will be negative but much better than expected. MSNBC continues to put lipstick on the stock market. But the technical indicators now are aligned with the negative economic fundamentals and not even “Mad Money” spin can make a purse out of this sow’s ear.

Market Outlook

U.S. stocks fell sharply 2/3 after Tuesday morning’s end of the quarter fund repositioning buying binge. Obama as president of the American electric car industry is an improbable success story especially since Obama does not support nuclear industry expansion that is the only way to ever get electric energy cheaper than fossil fuel energy. So the “democrat socialist” unrealistic anti nuclear policy would require more deficit spending to slant the playing field in favor of electric cars. More deficit incentives will not help since America is already being spent into bankruptcy. The auto unions are now refusing to make further concessions to make GM viable. Chrysler will only survive now as a subsidiary of the Italian FIAT company. Henry Ford’s company may be the only American auto company to survive Obama through the next three months.

The inevitable Obama bankruptcy of America will make this decade another FDR type “lost decade” of socialist experimentation and fumbling of economic issues. Let us hope it does not end with a world war. This rally appears to be over and yesterdays afternoon decline confirmed the end of what had been positive Parabolic SAR and MACD trading trends. This is a trader's market not a long-term investors market and cash began flowing out of the market again yesterday.

Asian shares were mixed last night with Shanghai up 1.5%, India up 2%, Japan down 0.8% and Hong Kong down 0.4% after a mixed day on Monday.

European markets are mixed in the range of 0% to 0.2% mid way through their day. France threatens to walk out on Obama at the G20 conference. So what else is new!

US futures indicate the DJI will open the day down about 50 points at the start. All the American equities markets are still over bought. All of the American markets have had successively declining lows that indicate a bottomless money pit. But those lows have been decelerating declining lows which give us hope that this next equities decline will be the true and final bottom for this recession. That would be a reasonable assumption since the economy is now expected to decline well into early 2010.