CIA Titan

Charts: On the last day of 2011 the S&P 500 was a whisker below its 200-day moving average, indicating that it was still in a bear market. In the last few months of 2011 it was displaying a coiling pattern, where volatility comes down and the spread between highs and lows tighten. The Nasdaq and the all-world index over that time period were both forming a clear wedge pattern. Both wedge and coiling indicate a market that is going to break either up or down when the pattern is complete. The direction of the break should have long term implications because the sharp end of the wedge centered on the 200-day moving average.

With the new year the market broke above the 200-day line of 1260 with the breakout conformation number at 1270. Today the index tested 1270 and found support. The breakout was in good volume compared to recent downdrafts. The charts then are saying we are in a new bull market. Charts can always be wrong but that's what they are saying.

Fundamentals: In Q1 2012 Euro-zone banks and governments have to roll over $700 billion in debt. Rating agencies may downgrade Euro debt and make a successful roll over impossible. China and America are getting stronger but the Euro-zone could tear us all down. Consider this one factoid: Italy has cut subsidies to loss-making Communist newspapers by only 50%. Italy is not serious about deficit reduction if it is still floating debt to subsidize Communist newspapers. So Europe is screwed. But the rest of the world can soldier on. This is the tug-of-war for 2012: Sick Europe vs. a relatively healthy world.

All CIA Channel: The #1 chieftain of the Pak Taliban is in open warfare with the #2 chieftain. The top bad guy thinks his underling is taking money from India, this is the source of the warfare. Al Qaeda and the Afghan Taliban are trying to hold their fragile axis of evil together by holding jurgas or meetings. This is a towering achievement for the CIA.

In Somalia, the African Union Army, the Kenyan Army, and the Ethiopian Army are tearing territory away from Al-Shabab. If the Somali war is successfully concluded, then the good guys will have a launch pad for attacking Al-Qaeda in Yemen. Using African armies to fight the Long War in this part of the world is the only way to go.