Greek Marxist Terror Bombing

Charts: The S&P 500 was down 1.9%, closing at 1136. The market is in a correction. It will be very bad if these support levels are violated: 1120 - the pivotal Fibonacci #. 1115 - breakeven for the year. 1110 - the 200-day moving average.

Fundamentals: US economic data came in strong today. However, a host of concerns overrode this good news: sovereign debt in Europe, weak growth outside Asia, the US Congress attacking financials, and electronic gremlins hidden in trading platforms. The specific trigger for the latest leg in the correction is the bombing of a Greek prison and courthouse by the Greek Marxist group “Revolutionary Struggle.” The CIA will have to help the Greek government clobber these communist bad guys so austerity measures can proceed smoothly. It is a sign of great stress when the CIA is mentioned in the fundamental section of the newsletter but also a sign of hope.

Geopolitics: The FBI has uncovered a Pak Taliban ring within the US that was part of the NY car bomb attempt. The Justice department has gone from crowing about catching these bad guys to trying to calm public anxiety. Pak Taliban presence within the US is alarming investors.
Quasi-Islamic rebels in Kyrgyzstan captured several government buildings on Thursday. By Friday the government recaptured these buildings with dozens killed on both sides. An Islamic insurgency could be arising in Kyrgyz, only a few miles from Afghanistan. The CIA and Russia’s FSB are probably working together to stamp it out.
In heavy fighting, NATO and the Afghan Army have killed dozens of bad guys this week in northern Afghanistan. Recent battles have been almost exclusively in the north, centered on protecting supply convoys for the Battle of Kandahar, which will start in June. If fighting is this heavy just to secure supply lines, imagine how nasty the actual battle will be. America’s collective consciousness is slowly and painfully shifting toward acceptance of a multi-decade (if not multi-century) war, causing volatility in the stock market.