Painfully We Move Forward

Charts: The broad index has broken out of its 1 1/2 year consolidation channel by trading convincingly above 1370. By that I mean technical indicators like the advance/decline are supportive. In the last few days the market has been flat, volume has been low, which is good. If volume were high in a flat market we would have stalling, which is bearish. Next resistance is 1422. As screwed up as fundies are we still need consolidation and a new channel of 1400-1422 before a true break-out can be considered strong.

The Eurostoxx 600 (European equivalent to the S&P 500) has executed a Golden Cross, where the 50-day line punches up through the 200-day line. This is bullish. However, the S&P 500's 200 day line has gotten pretty high and any sharp downdraft could pierce it, this is a caution flag.

The Hong Kong market is trying to punch up out of a 5-year consolidation pattern and it shows both long term and short term coiling behavior. So it could ratchet up or hurt you bad depending on how it uncoils. You can buy the index with ticker symbol EWH.

Fundamentals: Data out of China is horrible. Bad news is good. The market thinks Beijing will hit the juice and stimulate the crap out of its economy. Maybe. China levered stocks are up today.

Long War: In Syria, Assad's army has pushed the rebels out of the key Salaheddine district in the globally crucially Battle of Aleppo. The media is acting like troop movements and territory are key to this battle. But its really all about supply lines. Assad's army has severed rebel supply lines a couple times only to have them reform. The CIA has built a warren of rebel checkpoints on roads through rebel controlled land stretching from Aleppo to rebel supply bases in Turkey. It seems that Langley has done a bang-up job with all this careful spadework.

Assad's army still has not launched its huge ground invasion of Aleppo. It continues to use heavy weapons, small infantry squads, and snipers to push forward. There is fighting throughout the country, not just Aleppo. One gets the feeling that Assad is afraid to flood Aleppo with a massive numbers of infantrymen because he then would have no reserves to counter rebel attacks throughout the rest of the country. A rock and a hard place. It's a bitch being a tin-pot dictator on the wrong side of the CIA. And yet there is a lot of war to be fought. If push comes to shove, Assad will use chemical weapons.

The rest of the Long War grinds along. In Yemen, Al-Qaeda has mounted a huge terror campaign that is knocking the good guys back. Al-Qaeda affiliate Boko Haram is raising hell in Nigeria. The fighting season in Afghanistan is going poorly.

But the big picture is that the CIA is taking over bit by bit in Afghanistan. There was a high level meeting between Director Petraeus and the leaders of Pakistan's ISI. The ISI is now acting like a whipped puppy after this meeting. Painfully we move forward.