Trade volume and market breadth has been extremely low so far

Market forces April 30

While the market appears oversold, the Parabolic SAR and the MACD indicators could turn bullish in less than two weeks. Yes the market volume has been extremely low but it is low in recent declines as well as rallies. Market participation has been low and consequently the market has been easily manipulated.

Obviously President Bush did not have a clue when he first declared victory in Iraq and that misinformation was the beginning of the end for Bush. It showed that Bush misinformed about the severity of the threat of Hussein just as the MSNBC declaration of economic recovery now shows that Obama misinformed about the economic threat so that he and Senator Dodd could precipitate bank failures and thus Obama could get elected. McCain was taking the lead just before Dodd leaked the names of weak banks and Geihtner let Lehman fail.

It is a situation similar to when President Bush declared victory after a few weeks in Iraq. MSNBC/GE declared victory over a "Great Depression" in the first 70 days of President Obama. It is a contradiction of terms that says either MSNBC/GE is misinforming now or President Obama's campaign and administration have been misinforming all along just to frighten and spend America into a socialist state subjecting America to hyperinflation down the road.

Obama, the unions and other socialist ousted Ken Lewis as Chairman of Bank of America. Ken Lewis had the courage to expose the coercion being used by the Obama administration and has been punished severely with potential BOA witch-hunts to follow.

GM is now controlled 40% by the GM union and 50% by the Obama administration and the investors who put up 40% of the GM capital only got 10% control. The FED put up the remaining capital

It has been reported that talks between Chrysler and its bondholders broke down overnight and a bankruptcy filing for the automaker is now all but certain. Bankruptcy puts bondholders ahead of unions and FED socialists.

Obama now claims the new deficits and the new bubble he is creating belong to the Bush administration as well. FED Treasury trading is down, with volume done through the primary dealers averaging $363.6 billion a day this year, compared with $655.6 billion in the same period of 2008 according to Fed data. Trading must be higher to finance the Obama deficits or else interest rates will rise uncontrollably in the future.

Russian President Putin recently posthumously honored Iowa born American communist George Koval for giving the Soviet Union the secret that allowed then to trigger their first atomic bomb. During the FDR administration communism as well as socialism was extremely popular in America and the socialist regularly celebrated with May Day parades as the Communist dictatorships love to do. Yet the socialist FDR administration allowed Koval access to America's highest secrets. FDR also agreed to allow Stalin to take half of Poland and forced Germans out of part of East Germany so that the displaced Polish people could be relocated.


Market Outlook

MSNBC, a subsidiary of GE, continues to misinform and distort the news. The decline in the American gross domestic product was the same in the first quarter of 2009 as it was in the last quarter of 2008, 1.5% per quarter or a rate of 6% per year. The rate of decline is the same, not improved or slowing. Meanwhile housing prices continue to drop at 24% per year or 2% each month and continue to perpetuate the mortgage crisis.

MSNBC, a subsidiary of GE, continues to misinform and distort the news about market highs and lows. It said yesterday that the market made a new high. The last DOW high was 9035 on Jan 2 and was 8186 yesterday. So MSNBC misinformed because yesterday did not signal a bull market. The Dow needs to go up another 849 points (9.4%) today for it to signal a bull market. The new high must be higher to signal the market bottomed.

Similarly the last S&P high was 935 on Jan 6 and was 874 yesterday. The S&P needs to go up another 61 points (7%) today for it to signal a bull market. But by lying they end up with MSNBC and Obama setting America up for an immanent stock market decline. After a 70% decline a 30% rally still leaves a market with a 61% decline.

Overall, market price/volume behavior continues to be discouraging. The market has a variety of overbought indications such 80% of stocks over their 50-day average, where prior bull market rallies have tended to fail. And there is also the over extended McClellan oscillator index and low volume to be concerned with.

Stocks have failed so far to recruit much in the way of strong participation other than junk indicating little desire to take on additional market risk by serious investors. There is also little, merit on the basis of valuations even if profit margins recover in the years ahead. The argument that stocks are “once in a lifetime bargains” ignores the fact that former overvalued levels with record profit margins cannot be repeated with a regulated and deleveraged union dominated socialist economy.

It took until the end of WWII for the American economy to recover to the early 1929 economic levels. FDR's socialist policies did not work, they made the economy worse until FDR abandoned socialism and turned capitalism loose to fight the war. The 300% FDR recovery following the 90% loss still left FDR with a 60% net loss relative to 1929 not a 300% gain as socialists/communists/MSNBC/GE like to report relative to the FDR administration's lowest level. Americans just need to look at their 401 levels to understand the nonsense of MSNBC/GE/Pravda that Obama is the messiah.

Asian shares were up last night with Shanghai (China) up 0.4%, India closed, Japan up 3.9% after being closed yesterday and Hong Kong up 3.8%.

European markets are currently up in the range of 1.6% to 2.3%, mid way through their day today.

US futures indicate the DOW will start the day up over 100 points. When deception is exposed then enthusiasm turns to disillusion and complete withdrawal. The downturn could then set a new low.