Today - How many more bubbles have to burst before we take action? Obama’s getting hammered by the far left, far right, & reporters  - yet he pulls off another another press conference with grace, substance, and and purpose. YOUR comments bring up some different and provocative points of view.  The one chart or index that’s on the cutting edge of the rally .  IBM and Green technology. 

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Meet The Press

You can read a full transcript of last night’s press conference here. American’s demands microwave solutions and turning around the economy is not something that’s going to happen overnight. The last 8 years built a massive deficit and a massive financial problem. What Barack showed was a command not only as a communicator but in the details of what he’s trying to accomplish.

Obviously, this blog takes its shots at his administration, but I truly hope he succeeds.

You

Three different comments bring up well reasoned and different points of view. See comment section on the side of blog. 

  • Popeye – References a Bill Gross article (check out the graph in the editorial) on Shadow Banks
  • Fred Mays – Seemed to know exactly what Obama would say in his press conference and called for patience and long term thinking.
  • ewanapat - Also defended Obama and brought up his editorial that was published in 31 papers across the world.

The One Chart

Will the stock rally fizzle again? There’s one chart that’s on the cutting edge. See technical analysis section below.

IBM goes Green

IBM hops aboard high-speed rail

IBM is helping to build high speed energy efficient trains in China, Taiwan and the Netherlands. Also this is going to mean a lot of new jobs for those countries. One wonders how much of Obama’s alternative energy proposals will get cut from the budget. Full story from CNET

Cyclical vs. Structural

There are those who think that all we have to do is do nothing, others believe the shadow banking system will fix itself, others think the only problem is toxic assets. These are all reactionary solutions 

Investors411 looks at economics structurally. Granted its hard to structurally solve economic problems like energy, education and heath care with the deficit we’ve built up.  But unless we structurally change the bubbles will keep bursting and America will keep sinking. For more see Overview section of blog.

How many more bubbles have to burst before we deal with the structural problems?

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AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

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Index Percentage % Volume
Dow -1.49% down
NASDQ -2.52% down
S&P500 -2.03% down
Russell2000 -3.91% -

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Technicals & Fundamentals

Stocks retreated and volume dropped.  Well over 1/2 the gains of Monday’s huge rally held up. The dip was a bit too large, but the fall in volume is just what you want to see if you are bullish or long the markets.

We are reaching one of those critical inflection points. Over the past 6 months stocks have rallied twice over 20% only to fall back into the bear market. This is the third attempt (+21%) at a breakout. There is one chart that’s on the cutting edge. If we can break the series of lower lows and lower highs on this leading index there is hope that we can end the bear market cycle.

The One Chart

It’s the NASDQ. It is leading the other indexes in performance since the bear market began.  If you look at the chart (see left hand side of blog) you’ll notice a series of lower highs on the NASDQ that started in early 2009

  • Early Jan. high of 1665,63
  • Early Feb. high of 1598.50
  • Two days ago high of 1555.77
Notice this sets up a series of lower highs.  If we can break this on the leading index then, technically, there is hope that the other indexes will follow. So NASDQ 1598.50 is the magic number or resistance level we need to rise above.
Secondary IndicatorsThe Baltic Dry Sea Index (measures flow of trade) rallied before the markets turned and over the last 5 days it’s started to fall again (see chart at side of blog)
Reading the Tea Leaves – We’ve reached the area where the other rallies have run out of steam. So what happens over the next few days is critical.  741 is the line in the sand downside benchmark on the S &P 500.  There is a less significant support level at 804 – just 2 points above where the SPX now is.
 
Best move for stocks today would be a flat to slightly higher.

Long Term Outlook CAUTIOUSLY BEARISH

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

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

 


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