Al-Qaeda In Iraq Clobbered

Charts: The S&P 500 closed at 1207, up .8%. Support at 1190 was tested successfully several times during the SEC vs. Goldman sell-off. Earlier we saw that 1190 was a battleground support level. This is why it held up under the latest onslaught.

Fundamentals: Word has leaked out that the SEC had voted 3-2, along party lines, to attack Goldman. Two Republicans voted against the attack. So there is not a monolithic government effort to tear apart the economy and maybe at long last the Republicans are getting their mojo back. This newfound mojo had better defeat the financial reform bill or the warm, fuzzy feeling will go away.

Geopolitics: Afghan and NATO forces killed 13 bad guys, including 4 leaders, on Monday. A Taliban suicide bomber killed 2 good guys after infiltrating a NATO base. Taliban suicide bombers are killing large numbers of innocents every day in Pak tribal lands lately.
Iraqi and US Special Forces killed the #1, #2, and #15 ranked leaders of Al Qaeda in Iraq, delivering the bad guys the single worst blow of the war. This helped global stock markets. Here we see Iraqi/CIA cooperation from simply reading the mainstream media.
Recent events in Kyrgyzstan require deductive logic to ferret out the CIA’s role. Consider: Kyrgyz’s deposed bad guy president, Mr. Bakiyev, was trying to jumpstart a guerilla war by addressing a huge group of his followers in the southern part of the country when a group of men (supposedly part of his loyal group) opened fire on the deposed president, scaring the hell out of him. As if on cue, diplomats from Russia and America quickly made contact with the terrified Bakiyev and spirited him to nearby Kazakhstan. Since then an emboldened Bakiyev has escaped his exiled country for parts unknown and bad guys have killed 5 people near the Kyrgyz capital, possibly the start of an Islamic insurgency. Deductive logic tells us that, with CIA cooperation, Russia’s FSB planted gunmen in Bakiyev’s group and they opened fire. Bakiyev has apparently figured this out and is back in the fight. CIA/FSB cooperation is good. A new insurgency is bad.

Specific Stocks: Syria is apparently giving Scud missiles to Hezbollah in Lebanon, giving the Shiite radicals the ability to hit any part of Israel. This is good for Raytheon (RTN) and its Patriot anti-missile system. It is bad for the Israeli stock market (ISL).