WHAT’S UP? – Iran Day 6 – Health Care, Despite 76% of American’s wanting a public component, its in trouble, why – The regulatory rewrite – Reading the Stock Tea Leaves – India – Stock predictions and more

Iran Day 6

Supporters of defeated reformist candidate Mir Hossein Moussavi line the streets of Tehran Wednesday.

Best sources for what happening remain The Huffington Post , Andrew Sullivan’s blog, and the BBC . (See yesterday’s post)

  • Day of mourning for fallen proclaimed by opposition leader Moussavi
  • Demonstrations continue and Ahmadinejad government continues to censor press (foreign and Local) and beat/arrest demonstrators

Scott (see posts on the right) reminds us Ahmadinejad is not a dictator and more like a "Secretary of State." He’s right. The "Supreme Leader" Ayatollah Khamenei is the religious dictator . He is backed up by a group of other religious leaders whose head is a Moussavi supporter.  The question is will this oligarchy of conservative religious leaders win or will "Supreme Leader."

Remember there were over 300 candidates for President and only 4 approved candidates allowed to run.

Health Care

76% of Americans want a public heath care plan to go along with a private plan NBC/WSJ Poll Link Unfortunately this legislation is in trouble. Here’s why.

  • Opposition by HMO’s who fear competition
  • Opposition by Drug companies who fear decline in prices
  • Opposition from AMA. Doctors who fear loss in revenue.
  • Decline in Obama popularity because of the depth of the economic problems.

STOCKS

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

Index Percentage % Volume
Dow -0.09% up
NASDQ +0.66 % up
S&P500 -0.14% up
Russell2000 +0.65 % -

-

Technicals & Fundamentals

So far Volume has simply not confirmed any price move. Yesterday volume, although higher was not yet even close to average.

The exceptions is the NASDQ – Yesterday’s modest rally was accompanied by above average volume.  This is not yet significant because the rally was so modest +0.66%

Jobless rate for week =

Long Awaited Government’s Regulatory Fix

The administration released its prescription for regulatory fixes for what went wrong in the financial meltdown (102 pages) The reaction from Wall Street – Stocks went nowhere .

You’d think at least financial companies (shadow banks and related institutions) who got us into this whole mess would be in panic over regulatory changes. The XLF (financials/shadow banks) did loose -2.93% yesterday and is down this week in anticipation of this report. But this drop is not nearly as big as many over the past few months.

Conclusion – Too early to draw a conclusion about how effective some of these changes may be. They have to get through congress. Simply judging from the reaction of the Shadow Banks prices.  Their concerned – prices have fallen – but not panicked.

Just judging from how investors are reacting to proposed regulations – The suggested regulations are not tough enough. If they were we would have seen a bigger meltdown.

This is, hopefully, going to be the biggest regulatory rewrite since the Great Depression .

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. After two significant days where the dollar was up a total of over 2% it fell -0.58% Tuesday & -0.59% Wednesday. 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. -2.93% in noticeably higher volume .

WTICOil prices closed up -0.67% 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 5 day rally. But yesterday the move higher was minimal and we have not reached the highs of 6 days ago.

Reading the Tea Leaves

Monday’s lead statement - " Expect a tired low volume market to retreat this week ".

The rising dollar is technically the most important influence on stocks. The correlation between the dollar rising and stocks doing the opposite is perhaps greater than 80% over the last few months.

NBVolume is confirming Nothing. So it looks like the support levels will hold. This prediction yesterday looks premature . The XFL (could fall off a cliff if they think financial regulations are too stringent) and this would bring stocks down. Of course we need good regulatory laws and enforcement to prevent the same thing from happening again.

Positions

IFN (India) - Bought a small amount of IFN yesterday (India) yesterday at 27.6) This will probably fall more in sympathy when US markets fall.  So I may be premature in buying. Will buy more on larger dip.

The dollar is still key to market & oil prices.


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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