Charts: The stock market is in a shaky rally attempt within an ongoing correction. Monday’s big 4.4% gain was in weak volume. Today’s .3% loss was disappointing because the index needed to see consolidation. Yesterday support at 1150 was tested 7 times and held. The S&P 500 finished today at 1156, so support is holding. 1150 is where the first correction of 2010 started and is therefore a key level. The most important technical indicator right now is the Euro vs. the dollar. The stronger the Euro the better. The Euro is still very weak. Overall then, the charts are not great.
Fundamentals: A trillion dollar life preserver is being thrown to the Euro-periphery as it drowns in debt. This buys time for the whole Euro-zone. Now it needs to start growing by implementing free market policies, which will take a long time. Chinese inflation is coming in hotter than expected so we can expect more tightening from Beijing. Stocks levered to China are getting hammered. This leaves America as the only short term source of global growth (scary).
Geopolitics: The Justice Department is breathlessly telling the world that Shahzad (the NY car bomber) was working directly for the Pak Taliban. The Pentagon and CIA are yawning over this revelation and moving on to other problems. On Sunday a CIA drone wolf-pack attacked the N. Waziristan Taliban’s home village and blew away 10 bad guys. Karzai is in America right now rubbing elbows with liberal Congressmen who want him to negotiate peace with the N. Waziristan Taliban. This is the CIA’s way of saying, “Don’t do it, Karzai.” Stepping up the pace, on Monday and Tuesday a fleet of CIA drones hit two other N. Waziristan villages, a training camp right on the Afpak border, and at least one vehicle. Hellfire missiles sent dozens of bad guys to Hell (ironic).
After getting blasted by the US Congress, the Pak Army is telling us they are fighting the Pak Taliban in their current offensive. So far this week 73 bad guys have been killed and 9 good guys. On Monday the Pak Taliban tried to overrun a Pak Army outpost with platoon-sized units, this is where the good guy casualties came from.
It is also heating up in Afghanistan with US Marines and the Afghan Army killing 10 bad guys over the weekend.
Finally, the South Korean military says a North Korean torpedo sunk one of their warships a few weeks ago. Like all geopolitical issues across the globe, this is an American problem and it is up to America to make sure it doesn’t happen again; which means working through China to threaten an aid cut-off to North Korea. Korean stocks got shredded.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment