Charts: The S&P 500's 50-day moving average is 1314. If it trades below that level for several days, then the market will be in a technical correction. Over the past 2 months the chart looks like one half of a bearish head and shoulders pattern. If a correction ensues it will further this nascent pattern. The bull market has displayed this pattern before and recovered, this is unusual and I wouldn't count on it happening again. However, the pattern has not formed yet.
Long War: CIA drones vaporized 6 Taliban fighters in S. Waziristan, part of the tribal lands of Pakistan. The Pak government is forbidding CIA drone flights and demanding the Agency remove huge numbers of operatives from Pakistan. The CIA by its actions is refusing these demands. The next move is Pakistan's.
Turkey says it is seriously considering opening a diplomatic office for the Afghan Taliban in Ankara. This office will be used by the Taliban and Karzai's government to negotiate a peace accord. As you will recall, similar negotiations by Karzai's government and the Taliban that occured in Pakistan were met by CIA drone strikes, torpedoing the talks. Of course the CIA cannot launch drone strikes in Turkey.
The US has been telling Germany to step on a certain Iranian bank that does business with the European giant. Germany is refusing this request.
Clearly we see an erosion in US authority over its allies in the wake of the Libya War fiasco. Western intellectuals for decades have been gleefully looking forward to the end of the mono-polar world order. The above developments are a far cry from the end the current world order, rather they represent a weakening of it. Nevertheless, the intellectuals will get a taste of what they have long been wishing for. My guess is they won't like that taste one bit.
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