The stock market in China has hit a resistance level starting in July.

Market Outlook

We are taking profits as fast as possible while they last. When stocks rise 9% or 11% in one day we know that is not a high probable result so we take such gains before the market close because we know that by the next morning investors will be lining up to sell.

The turnaround for the economy is now real but fragile. But the real problem is the moral decay of socialism; the decadence of the west as Daniel Henninger described in the WSJ yesterday. The peace prizes for Al Gore and Obama bring home this point. The decadent old Europe which Obama wants to emulate with socialism has only five nations left that can muster more than 2% of their national budget for their own defense much less to help nations being overrun by evil neighbors and sick social/theocratic ideologies. The preoccupation with Europe's decadent belief in the hoax called human caused climate change shows how silly and capricious the decadence has become. Next it will be peace prizes for the latest diet or vitamin regime. The decadent west cannot face the hard decisions any more like the Pershing missile defense system Europe deployed in 1983 aimed at the Soviet Union. Today there is no backbone left due to creeping socialism.

This decay of the west is nothing new. It preceded and resulted in WWI and WWII each time when America receded into isolationism. Socialism and communisim were invented in the 1800's. Isolationism is where the democrat socialists are taking America now as we venture into the hallucinogenic state of imagined human caused climate change, and music therapy for world hunger. Hopefully America will wake up in 1010 and throw the Democrat and Republican socialists out en masse.

Only the private sector can create jobs that create value and wealth that can then be used to pay taxes and make government sustainable. Communist/socialist government jobs require taxes on productive people and productive industries and create a dependent majority of freeloaders, political hacks, with make work jobs for unemployable hunter-gatherers, and union jobs with freeloading featherbeds, corruption and strikes. In socialist France even the doctors go on strike. In communist East Germany the people had a saying, "Government pretends to pay the people and the people pretend to work. Government printing money to pay people to do nothing does not work and never has worked. We need to also remember that Obama has two tax cheats to oversee the American economy and originally hired an avowed communist for nationalizing the American auto manufacturers. Today Ford is the only American auto manufacturer and all the rest are run by socialist or communist manufactures.

Unfortunately socialists like Obama historically cause depressions. Those depressions always had an intermediate economic turn around before the government "stimulation effort" failed and the "Great Depression" began. We need a congress that supports free enterprise elected in 2010 or else this socialist depression can go on for 10 to 50 years before the government is thrown out or destroyed by wars. The soviet empire endured 50 years of what we would classify as the misery of a great depression. National Socialism brought Germany to smoldering bombed out ruins.

Economic news today, Friday, Oct. 16,will focus on
---Industrial Production/Capacity Utilization - Sep
---Consumer Sentiment


Market forces October 15

Bank of America's lost $1 Billion in the third Quarter due to Barney Frank's mortgage related defaults at this biggest U.S. lender.

GE's profit toped estimates on industrial-unit cost cuts but analysts are spinning it negative today. It is unreasonable to expect sales growth under socialist repression of productive people.

At Dow 10000 we are back to where we were in October of 2008 and in 2004 and April of 1999 before that. But today we have a radical left socialist government in power capable of bringing down America with their parasitic socialism… decaying from the inside. Ayn Rand escaped Soviet despotism and spent her whole life fighting what she called the parasites of socialism that work like worms in the brains of leftists. Economist Alan Greenspan is perhaps the best known of today's followers of Ayn Rand. While we are not Ayn Rand devotees her works are nevertheless well worth reading as socialism poisons and attempts to kill liberty and free enterprise with welfare for the indigent and government hacks paid for with taxes on the working Americans. This attack by tyranny on American liberty and free enterprise is as old as America.

We are optimistic again, ha, ha. How can anyone be truly optimistic until the leftists are democratically voted out of office? The market has to rise 40% just to get to its 2007 levels without the inflation of Obama's printing presses. There is quite a bit of upward potential left but we are entering a potential horizontal consolidating market value range and Obama socialism can still cause another Great Depression.

Asian markets entered a consolidating range in July and were flat last night; China down -0.1%, Hong Kong down -0.3%, India up 0.7%, Japan up 0.2%, and Seoul down -1.1%.

European markets are down in a range from -0.4% to -0.7% this morning about half way through their day.

US pre-market are lower today by about -0.3% at 8:00 AM EST as analysts create a negative spin to see if this rally really has legs. Yesterday was an up day even though it started near -0.5%.