The Truth Shall Set You Free. Not!

Charts: Round number support is key right now for the major indexes. The S&P 500 is finding significant support at 1400. The Nasdaq is finding support at 3000. However the small cap Russell 2000 just lost support at 800. Overall action is flat with a slight upward bias. Volume was very low today, which is good for a flat market.

Fundamentals: The strong rally that started with the ECB promising another round of QE (printing money out of thin air to buy bonds) is fading because the ECB hasn't started QE yet. The market loves QE even though it doesn't work. The Bank of England is getting ready for QE4, yet the British economy sucks. Japan is on something like QE20, its economy really sucks. QE does two things, it jacks up the price of commodities and it jacks up stocks. Higher stock prices creates a wealth effect which is good. Higher commodities obviously hurts economic growth. The two cancel out, so QE ends up doing nothing. It is being used as a substitute for free market reform. There is no substitute.

Long War: The civilian government of Egypt is busy sacking army officials. Normally you'd think that is bad, but the Egyptian Army has gone to war against Al-Qaeda in the Sinai Peninsula, which should have been done a long time ago. Something therefore is going right in Egypt. As the good guys dig into the Sinai they are discovering that Al-Qaeda is much stronger than they thought, so strong that the bad guys could probably start a war with Israel and drag Egypt into it. This is why Egypt is attacking.

In Syria, the rebels are grimly holding on in Aleppo but they are opening a new front in the oil producing region of the country. Assad cannot afford to lose any oil fields, so if this new offensive makes headway, then bad guy troops will have to be funneled out of Aleppo. Good chess playing on somebody's part.

More and more experienced fighters from Libya are turning up in the ranks of the FSA, training, leading, inspiring. Here we have another example of CIA fingerprints, and they are well disguised prints, hard for anybody to fathom.

It pays to ponder the very nature of the CIA. Imagine you are walking through the marble clad headquarters in Langley. Overhead you will see an inscription, the CIA motto, which is from the Bible: The Truth Shall Set You Free. Not far from this inscription are a few rows of stars, representing all the CIA operatives that have died in the line of duty. There are only about 50 or so stars. A number that is laughably low, absurdly low, an obvious lie. A lie right next to the motto about truth. Here we have an existential message concerning the world's premier intelligence agency: We are lying to you, but its for your own good. So shut your pie-hole, look the other way, leave us alone, and let us do our thing.