Old-fashioned CIA Assassination

Charts: The S&P 500 closed at 1159, up .8%. Over the past several trading days the index has been defeated by the 1150 resistance level 6 times. In moderate volume it broke through this barrier, signaling possible continuation in the current rally leg. Support is now 1154.

Fundamentals: Greek debt was given a thumbs-up by a rating agency, cooling fears of default. The Fed says interest rates will remain low for a long time. Also, the Fed says that while it still plans to stop buying mortgage backed securities in a few weeks if housing softened dramatically, then the buys would restart. That’s the good news. Rumors are swirling of another rate hike in China, the bad news.

Geopolitics: The Afghan Army killed 5 bad guys Monday without help from NATO. It killed 9 bad guys (including a Taliban commander) on Sunday with NATO back up. Over the weekend the Taliban tried to blow up a prison in Kandahar to release hundreds of imprisoned Taliban fighters but failed because Afghan Intelligence knew about the plot ahead of time. This paints a picture of Afghan forces making rapid progress. However, the Afghan Taliban is making and planting 22 IEDs every day, that’s 8000 a year. NATO and the Afghan Army are encircling Kandahar by taking over numerous small villages on the big city’s periphery. The Afghan government is sending 1500 extra police to Kandahar to help control the city as the noose tightens. The Battle of Kandahar is coming faster than expected.
In Yemen, the truce with the Houthi rebels is holding so the Yemeni Air Force has started a bombing campaign against Al-Qaeda positions. The Yemeni government says that AQAP is planning big terror strikes and its campaign is disrupting the bad guys.
The New York Times says that a former Defense Intelligence operative named Michael Furlong has been running an assassination ring in Afghanistan and funding it by siphoning money from an innocent-sounding US program to “study the tribal landscape.” Furlong has no provable CIA connections but the good guys doing his dirty work are former CIA officers and CIA-linked Delta Force soldiers. The CIA says it is positively shocked that a rogue clandestine operation has been running under its nose and it only assassinates bad guys with drones, never the old-fashioned way (yeah right). It is a sad commentary on the folks here at Dave’s Geopolitical Market Update, but we actually like rogue CIA operations and buy stocks when we hear about them.