WHAT’S UP? – Many Thanks to posts from d , E Wanapat, & JB on how to follow the coup/revolution in Iran. Great stuff! “Neither Free or Real” from the NYT – Intent & Twitter break news while networks/cable sleep  Day #3 of Coup in Iran – Important Summers/Geithner editorial – Outlook for stocks and more

Dorm Room Door in Iran’s Ishfan Technical University

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“Neither Free or Real”

The NYT headline editorial entitled “Neither Free or Real” about the elections in Iran.

It is essential that Obama recognize the plight of the young revolutionaries in Iran. This view is held by most from the far right Weekly Standard to all the liberal blogs following the “green revolution.

Huge kudos and Thanks to those of you who listed sites that readers could go to to witness the videos of the violence, brutality and oppression  by the dictators in Iran . You can follow what’s happening live by going to those sites or on suggested Twitter sites. The videos are in many cases horrific and brutal. See posts on left hand side of blog.

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Brutalized Iranian protestor – Both photos from Andrew Sullivan’s blog

Some Significant Points

  • There is a huge reform movement among the Iraq people who genuinely desire freedom. This is a majority of the Iranians. Unfortunately the dictators have all the guns.
  • This coup by holocaust denying dictator Ahmadinejad (fronting for militant Iranian Mullahs) was well planed down to the details of the Interior ministry surround the place the count the votes before elections were closed.
  • News coverage by networks and cable TV is slow and out of focus compared to the internet. While watching the brutality happen CNN’s Larry King was asking Ahmadinejad questions about his kids.
  • Most likely, in the short term, Iran is going to move in the direction of N. Korea. Editorial analysis here
  • Lots of decent coverage on internet that you all sent in. Perhaps the best is Andrew Sullivan’s blog The Daily Dish He writes for the Atlantic magazine. Their weekend wrap up of what happened can be found here

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index Percentage % Volume
Dow +0.32% down
NASDQ -0.19 % down
S&P500 +0.14% down
Russell2000 +0.14 % -

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Technicals & Fundamentals

Breakout is not an accurate description of what’s happened to the market.  We have “INCHED FORWARD”  There is no real conviction in the volume behind the move higher. Yes markets have remained above “breakout levels” for about a week, but it seems like a very hesitant bunch of investors waiting for a massive counter attack.

The situation in Iran is not going to help markets. Asia & Europe down 2% as I write

Obama is going to lay out his concepts of regulations on financial markets and that also is  probably not going to be bullish for the stocks. This happens on Wednesday. Obviously some kind of regulation is needed to keep the greed of unregulated free markets from self destruction.

Larry Summers & Tim Geithner have a  must read for investors in the Washington Post entitled “A New Financial Foundation” Geithner and Summers have often been treated negatively in this blog, but the outline in decent. It makes the Fed the systemic risk regulator & all derivatives are “subject to” ( not – will be) regulations.   The devil is in the details.

This is all going to be a huge mess in front of congress. Lots more as this gets worked out this summer.

Reading the Tea Leaves

Expect a tired low volume market to retreat this week.

The battle over regulations on a unsupervised shadow banks will probably halt any short term rally.  The medicine is going to taste bad, but unless confidence in the financial system is restored we have no real long term stabile economic future. Right now we (the taxpayers) are socializing the risk while they rap the gains.

Technically – The BDI is bullish, and is a good long term indicator of the trend. How the dollar moves is now the most critical factor behind current     stock movement. Dollar rising = stocks & oil prices dropping.  Another reason to expect a down week.

Significant forecasting tools/Indexes for stock markets

$USD - Repeated statements in brown The dollar is the index to watch You could write a book on the dollars influence on everything but for us the bottom line right now is – When the dollar goes down -stocks and oil prices go up and visa versa. Dollar is up in pre market rally and up a significant +0.97% Friday

XLF - The ETF that tracks financials (mostly shadow banks ) have been stuck in consolidation for over 3 weeks. + 0,64% in weak volume Friday

WTICOil prices down -0.99% Friday

BDI The Baltic Dry Index measures the flow of goods (world trade). Stated before -  This is extremely important because one of the greatest obstacles to a worldwide recovery is the lack of trade between countries (protectionism) 24 up days in a row, 6 down day in a row, & now 2 day rally. Bullish sign.

Long Term Outlook = CAUTIOUSLY BULLISH

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

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

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