Dali Lama Is a Bad Good Guy

Charts: The S&P 500 closed at 1150, up .4%. The broad index is exactly at a major resistance level.

Fundamentals: Consumer inflation data from China came in hotter than expected (scary). Chinese real estate prices are still soaring but the sales pace is slowing. So Chinese tightening measures are starting to bite. China is acting like the planet’s central bank, dictating the pace of global recovery and global inflation. This tightrope balancing act will probably work so long as oil prices don’t break above the technically significant level of $83 a barrel.
Sen. Leader Reid says reconciliation will be used to pass Obama-Care. So the Demos are growing for broke. If they try and fail it will be fantastic. If they succeed it will be very bad.

Geopolitics: America has 17 different intelligence agencies. The 17th agency (DNI) was created by Congress after 911 to stitch the other 16 together, a bad idea then and a worse idea now. A better idea would be to cut the CIA loose from bungling Congressional watchdog committees as well as DNI and then keep DNI busy by letting it screw with the 15 intelligence agencies that are not the CIA. This is exactly what Pres. Obama has done, proof he is brilliant in national defense.
The Dali Lama says he now supports China’s Islamic bad guys, the Uighurs, and hints that he will coordinate insurgent activities with them. The very first Gitmo detainees were Uighurs, very nasty folks indeed. The short guy in the orange robe is a genius at public relations in the West, but he is not a man of peace. Like many of today’s bad guys he is a Frankenstein-like creation of the CIA during the Cold War and his soldiers were used back then against Maoist China. So China will need help from the CIA.
Indonesian counterterrorist forces have killed the Islamic bad guy who masterminded the Bali bombings. All the recent progress we’ve seen against bad guys in SE Asia lately is starting to bolster Malaysia’s stock market (EWM). Malaysia is the most capitalistic Muslim nation and a leader in Islamic finance.

Specific Stocks: Nissan (NSANY) is the only Japanese auto maker with a brake override feature, which prevent the supposed surging problems plaguing Toyota. Nissan will benefit from Toyota’s woes and these woes will be long lasting. Nissan is introducing the only electric car in the US in a few months, it will do better than analysts forecast, and NSANY is cornering lithium ion battery supplies. Nissan is introducing a line of light commercial trucks that will do better than expected. The Japanese Central Bank says it is going to depreciate the Yen, which will help Japanese manufacturers. I like NSANY’s chart.
A.O. Smith (AOS) is the largest water heater maker in North America. It makes water heaters and electric motors in China (growing fast). Its stock is undervalued because the market thinks it is levered to residential housing. But most of its N. American revenue is levered to replacement water heaters, not new construction. The charts show AOS is starting to break out.