Time to finish your analysis of stocks to cherry pick back in.

Stocks are declining now due to profit taking and the realization that many stocks advanced too quickly with no credible evidence of value. Stocks tend to maintain their relative values. When any stock suddenly advances 50% with no supporting headlines while the market advances 24% we can expect the big movers to immediately be pressured to drop 20% to realign the values. But that causes the average to decline putting pressure on all the other stocks that may have risen justifiably. That equilibrium valuation pressure contributes to upward and then downward value variances which for the astute investor represent opportunities to place limit orders to buy on the downward overshoots of stocks.

Right now you should already have been cherry picked out of the market between Jan 20 and Feb 27 when Administration market ignorance sent the market down through previous lows and resistance points and just about every stock/financial analyst hammered clueless Obama into getting informed about how free world markets work. Until then the anti-capitalist Obama administration did not realize even the Communist Chinese used our capitalist free markets and sold stocks to raise capital. Had President Obama not recently educated himself on the importance of the stock market our 401 plans were about to take another 15% decline. Instead Obama stated the importance of the stock market and although he had already caused a new sixteen year stock market low, the market turned around and rallied 24%. We now expect a decline of from 11% to a maximum of 19%. Since the market was up 24% a decline of 19% from the recent high would bring the market to down to a double bottom of this market’s all time low. Yes we believe we are near what will be the low for the next ten years but we caution that given this administration’s corruption, profligate spending and socialist leanings they could stagnate the American economy for the next ten years as Franklin D Roosevelt did through the 1930s and as the Japanese did to their economy through the 1990s.



Market forces

The market yesterday showed buying volume was drying up faster than selling was increasing. Again that is characteristic of a region where people are able to take profits in anticipation of future panic selling.

Investors now fear that the trillions of dollars the government will print to finance the stimulation package will have great negative currency and inflation repercussions starting in six months.

Market Outlook

All the signs are saying it is time to cherry pick into a positive market position. All shorts should already be covered and profit taking should be done. Now it is time to look for the new bargains.

Asian shares were down sharply last night with Shanghai (China) down -3.8%, India up 2%, Japan down -2.7% and Hong Kong down -3%. It is becoming obvious that the Communist Chinese have been falsifying economic and market data. They probably have been growing at a rate less than half of what they claim. Their recession could lead to the overthrow of socialism if it becomes severe. The emerging market funds certainly have been underperforming relative to the apparent corrupt socialist's statistics. Socialist corruption could have a negative impact on many ETFs. Why are the socialists always, always, always so corrupt, so controlling and such abusers of human rights? We should not say the word “always” except when it comes to acknowledging socialist state oppression of individual liberties.

European markets are currently mixed in the range of -0.3% to +0.6% mid way through their day today. The EU is contracting faster than seen in 40 years.

US futures indicate the American markets will start the day mixed. 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. The US markets declining and will present select opportunities to astute investors seeking value by catching individual stocks that are forced down into higher value ranges.

It is expected that earnings reports will now be dismal but the Pravda media spin will continue 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 slightly. We may see this bottom again in less than a year from now. George Soros made two investments in 2008. He invested heavily in Obama’s campaign and is betting on the collapse if America’s currency. He is seeking a basket of currencies and is buying the ones that will benefit and selling America short. American can still throw some of the corrupt bums out of congress in 2010 and Barron George Soros with them. Count Obama will have to wait until 2012.

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. Banking Committee Democrat-Socialist Senators are doing many property deals. To avoid the obvious corruption of buying expensive property and giving it to the Senators at an obvious illegal lower price than the purchase price, the corporations that want to bribe the Senators bought property five or ten years ago and now sell it to the corrupt officials at close to the original un inflated price. In that manner corrupt Senators profit from the five or ten years of inflation because they don’t pay for the inflation. But when they sell the property they reap the 60% to 100% accumulated inflation in price.

Why do the socialist take bribes and still force banks to give mortgages to undeserving people… when the socialists will not allow bonuses for the disgraced bankers who were forced to follow Senator Dodd’s and Rangel’s obviously inept and corrupt mortgage banking policies?