WHAT’S UP? – Iran Day 7 – Kissinger, Kerry, Kahameni, Moussavi, Ahmadinejad, Obama Effect – Some conclusions – The “Supreme Leader” Reading the Stock Tea Leaves – low volume – The dollar & the Baltic Dry Index – plus more

IRAN Day 7

Friday demonstration -Photo Getty

  • Perhaps biggest rally yet as “Day of Mourning” brings million+ to street yesterday. Story Link
  • “Supreme Leader” Ayatollah Kahameni today called the elections fair Story Link
  • The “Supreme Leader,” this is the name they use for their dictator, accused US, Britian, and Zionists of compicity incasting doub on the elections.
  • Henry Kissinger endorses Obama’s hands off strategy “Anything he [Obama] says would handicap Mousavi “(opposition leader) This echo’s Senator Kerry “Think Before You Speak” editorial

Some Conclusions the Far Left and Far Right are NOT going to like to Hear.

  • The focus has shifted. It’s no longer The American’s against he Muslim world (you’re either with us or against us) but between the conservatives and modernist in Islam.
  • Ahmadinejad was created under the hard line Cheney/Bush approach to the Muslim world. The “Green Revolution” under the “Obama Effect”
  • Lesson learned – All Muslim’s are not the same – Just like American there are there many different sides
  • If the Ahmadinejad/Kahameni militant temporarilly win – remember they are the main supporters who encourage and support other violent terrorist groups like Hamas and Hezbolah.
  • Look at what the Ahmadinejad/Kahameni militants do to their own people and think what they would do to you, Sunni Muslims, Israel, or any who do not follow their orthodoxy.
  • These militants in Iran are more dangerous than “Supreme Leader” Kim in North Korea because they are religious miitants.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index Percentage % Volume
Dow +0.69% down
NASDQ -0.02 % down
S&P500 +0.84% down
Russell2000 +0.48 % -

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Technicals & Fundamentals

Mea CulpaLike many others I’ve been caught up in the events in Iran and not been doing due diligence on stocks and other issues. But still believe in basic conclusions listed this week. However,  the conclusions/forecasts have been pretty accurate starting Monday. See reading the tea leaves below.

Significant forecasting tools/Indexes for stock markets

Note - Repeated statements in brown

$USD The dollar is the index to watch. The bottom line right now is – When the dollar goes down-stocks and oil prices go up and visa versa. Dollar went up +0.45%.   It looks like the dollar may be establishing a short term bullish pattern (see chart)  of higher highs and higher lows.  Too early to tell difinitively. However if you get another 1 to 2% rise inthe dollar the mantra of the last few months will probably reapear. Investors 411 mantra is Dollar rallies = Oil & Stock prices fall.

XLF - The ETF that tracks financials (mostly shadow banks ) have been stuck in consolidation for over 3 weeks. +2.41% in low volume. Financials are in danger of breaking down through a major support level. (see chart) They got a reprieve yesterday. Any breakdown would be bearish.

WTICOil prices closed up +0.29% yesterday.

BDI The Baltic Dry Index measures the flow of goods (world trade). 24 up days in a row, 6 down day in a row, & now a 6 day rally. But again yesterday the move higher was minimal and we have NOT reached the highs of 6 days ago.

We could be putting in a double top or a slightly lower high. This would be a longer term bearish sign if it occured.

Reading the Tea Leaves

The conclusions/forecasts have been pretty accurate starting Monday.

  • Monday’s lead statement - Expect a tired low volume market to retreat this week .
  • Low volume means indicates no bias toward bulls or bears.
  • The low volume breakout has failed and we are back in the old consolidation area and, therefore back to NEUTRAL outlook.
  • Strong support at @ 900 on the S&P 500. This has held for a couple days.
  • The low volume indicates a technical correction of a market that went too high too fast.
  • The possibility of this 4% correction turning into a 10% correction exists – still with low volume

The key two words are low volume . This shows little commitment my major players one way or the other.

The BDI and especially the Dollar are the indexes to watch. This is a technical correction, but volume is the key. Some unexpected bad economic news could turn volume around and put the bears and fundamentals in control.

In the Long term its hard to see the dollar move higher because fundamentally we are printing so much money and injecting a lot of stimulus intothe markets.

Long Term Outlook = NEUTRAL

See Changes in STRATEGY, POSITIONS, & OVERVIEW sections of blog

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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