Obama in the Matrix – Everyone is taking shots at Barack/Neo, but…. Military budget gets announced to fearful Americans fighting the Evil Empire. The two, Two Cows – understanding AIG and Market to Market accounting with humor. They are back – after 101 years of trying – will they succeed?

photo from About.com: political humor

Obama in the Matrix

Obama is being totally dissed by the right that wants him to fail. Even lefties like Nobel Prize winners like Krugman  &  Stigletz as well as this blog are taking some shots at his administration. But his poll numbers remain high and USA Today headlines Obama’s trip to Europe as a “Success”

Military Budget

Today’s the day the Pentagon budget gets announced.

Lots of us hoped our paranoid country that spends what the entire rest of the world does on weapons would cut back just a wee bit this year. But alas our 3% of the population has to be armed and ready to fight the rest of the world. You thought only the NY Yankees were the Evil Empire, but to fearful Americans the rest of the world is still the Evil Empire. Well, Obama is giving the Pentagon less than they asked for, but more than last year. Another record budget story

The Two Cows


cows.jpg

photo from Clusterstock

John Carney  has some easy to understand, humorous ways to comprehend, both the Mark to Market and AIG using two cows. You can spend hours reading different editorials, like me, and still have a zillion questions, or simply skim his two, two cow stories. 

101 Years

Finally – Spring is in the air and that means the professional game of baseball that started in 1870 will be filling dozens of stadiums with thousands of excited fans. The dreaded evil empire, the New York Yankees, will once again take on the forces of good – the beloved Boston Red Sox.

The major Major league baseball story is about the team that will field nine players as they have for the last 101 years without winning a world series – The Chicago Cubs.

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

 

Stocks

 

Index Percentage % Volume
Dow +0.50% down
NASDQ +1.20% down
S&P500 +0.97% down
Russell2000 +1.32% -

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Technicals & Fundamentals

 The major indexes rallied for the 4th day in a row Friday. Volume fell, but we’ve already had 4+ “confirmation” days (day when there is both a significant rise in price and volume) since the rally began about a month ago. Another confirmation day at this point is moot. 

Key major index to watch is leading NASDQ - closed at  1622.(click on  charts at side of blog) Well above the  support levels of 1587 & 1598. Technically this breaks the series of lower highs on the leading NASDQ. That’s the first break on any of the major indexes for many many moons. 

Earnings season begins this week.

Rotation is still one key to watch. If other major sectors start to outshine financials (XLF) its a strong indication that in the short term the rally will continue.

Baltic Dry (Sea) Index - (see chart link on side of blog)  

Since 3/10 the BDI has fallen each day and yesterday was again  no exception. Another @-2.0%  Total loss from high more than 32%. How many days in a row can an index fall?

Bottom Line - If the flow of goods between countries continues to fall, so too will stock markets across the world. Unless we start to see some sort of rebound in the BDI a longer term rally in stocks is dead.

Correction: Real unemployment rate - includes discouraged workers etc15.9%. not 15.6

Reading the Tea Leaves -  Same as Friday – The gift of less transparency or the removal of Mark to Market accounting will help the giant over leveraged “Shadow Banks/Institutions”  That in addition to all the free money shoveled upon them will, hopefully, get them to make loans to businesses.” 

Longer term watch the BDI, if it keeps falling so will worldwide stocks. Trade drying up is a sign that protectionism is growing and less money flowing between countries. Like it or not, this is a globalized word and if money stops flowing between countries so will profits & jobs. It might be a week or three before the BDI impacts stocks, but trade is vital to improving all economies.

 


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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