So I have finally stepped up and got an iPhone. Now day two and I discovered this wordpress app. Wow! Can I really post blog updates from my phone now?this is sick

I hope to actually utilize this more, mostly on the daily comute.

As seen above, the S&P 500 ran into another spot of resistance (orange lines and purple arrows) at the
875 level. The index still remains above its’ up trend line (green dotted lines), though a trend line that is
less accelerating in nature. A close back below the 850 level is likely put the market on the defensive a bit. On a
violation of 850 the market may look to stabilize at the 825 level, which would be a test of the recently broken
downtrend line (red line).
Volume was better on Friday, however the CBOE Total Equity/Index Put to Call Ratio (not seen here)
slipped back under 0.72. Typically levels near or below 0.70 are short-term negatives. Additionally the AAII
Bearish Sentiment Survey has seen the number of bear’s contract from 70% just 5 weeks back to 35.86% in the most
recent survey. Given the contraction in bears and put/call we would expect some softness to work into the market in
the next few days.
Unlike just several months ago where all stocks were correlated with the market, many stocks are now
not correlated. Thus there is no reason to indiscriminately sell stocks across the board just because the
market may weaken a bit. We would apply unique risk management techniques to each of your names and let
them be taken out (ie. stopped to cash) or not naturally.

This is an urgent request; since the government has made it their policy to inject endless gobs of cash in industries and companies that they decide as ‘too big to fail” OR “too important, and must be saved” I have finally found the groups that must be saved at all costs, even if it means the end of TARP, TELP, TARP II, etc…

The industry I’m talking about is so important, has been an intricate part of America, and the advancement on the whole world. The industry is so interwoven with others; and yes it will lead to saving a few others as well. But, is not the growth of America worth it? Shouldn’t we do our best to save the companies that built the middle class, the ones that brought people together and moved us to the industrial giant we are today? There is NO price too high, we must save America…

The industry I speak of is of course the wagon wheel makers. The makers of wagon wheels are specialist and it is not the unskilled labour jobs that will replace them like working at Walgreens or Wendy’s. These companies spend a lot of capital to acquire their materials and the other industries that depend on them is nothing short of a long list of pro-American companies.

If we dare to let the Wagon Wheel makers go out of business the ripples in the economy will be felt for a long, long time. Can you even image what can happen?

First we would lose the Wagon Wheel companies and all their skilled labour out on the streets
Second, The The Covered Wagon makers from St. Louis to Armadillo would have to shut their doors in a matter of weeks from lack of inventory—all those workers then laid off (NOTE: need more unemployment benefits).
Third, all of the other suppliers of parts to the covered wagons would stop production because of lack of orders.
Fourth, The great wagon trains would come to an end. The United States would be a group of isolated areas with very little traveling-
Fifth, the social havoc that would come next from all those guys named “Cookie” no longer on the trail hanging around living off government assistance.
Sixth, with no travel by covered wagon we would have no need for frontier towns, gold rush or even the Internet (since we would just be hanging around with no mobility).
Seventh, the end of the Wagon Wheel Coffee Tables- Without them more marriages would not end in divorce -no need for lawyers (a whole different profession touched by this madness.
Eighth, Probably the most important industry in the country, one that must never be allowed to fail- The Buggy Whip Makers- will no longer be needed…THIS CAN NOT HAPPEN. Can you imagine a county without Buggy Whip Makers on every corner?
There are countless other industries and parts of the society that will be destroyed as so many groups are on the spokes of the Wagon Wheeler Makers. It is not an understatement to say without these Wagon Wheeler Makers the Country will stop moving forward- a new dark age may come about—your grandchildren will not forgive you if you let them go under and then they are stuck trying to find some solution in their generation.

Please stop the madness and demand that the President Obama and the US Congress nationalize the Wagon Wheel Industry to save us all..

posted by Peter Greene

On 3/10/09 we said ” Market internals (ie. the number of advancers to decliners and up volume to down volume) on today’s advance were the most bullish internal readings seen since the move off the 2002 lows … “

We also said ” When the skew of advancers to decliners and up to down volume is this strong it suggests almost a buying panic on the part of institutions to get back into the market. Additionally these strong internals also suggest that there is a confidence and conviction on the part of institutional buyers”

And last but not least, We said ” That said we believe today’s rally is the start of good move higher (again it may not be the ultimate low – only hindsight will tell us that) however the surge of momentum suggests this rally will be worth participating in. “

So here we are not many days later and up considerably from where we published those comments and now what ?

We still believe the combination of the market getting really oversold, attractive valuations, excessive negative sentiment, portfolio managers having a lot of cash on hand and the quarter end for many mutual funds coming up (ie. Window dressing time. After all if returns looked poor again more redemptions would follow) (and they last thing they want to show is down another 20+ %) led to a lot of capital redeployment. With the market moving higher quickly even more managers felt they would lag behind their peers and subsequent benchmarks thus even more money (ie. managers chasing the move) came into the market.

In addition was not unrealistic for many to think the stimulus package (no matter what you’re thought on its long term ability to be effective or not) will goose the economy to some degree at some point in the not too distant future. So that said we continue to view this current rally as having legs with maybe another 10 – 15 % up from present levels (So buying on dips with appropriate stop losses would make sense for the time being). We also continue to view this as an opportunity to make money on the long side for a narrow window of time (1 to 3 mos).

However, ultimately we think this rally will fade and we will get a retest of the recent lows (check the history books, we almost always get a retest.) How the market handles that retest will tell us a lot in regards to the longer term picture. We believe tech and growth (since they have the best bases and most constructive chart patterns and corrected much less than the broader market during the down draft) still outperform in regards to sector and style bias respectively during this rally/bounce.

In Barron’s this weekend, one portfolio manager, Felix Zulauf, made an articulate case that this will be a violent rally (900 on the S&P 500) followed by a move to new lows (450 on the S&P 500) with that ultimate bottom coming in 2011. This certainly in plausible and would anyone doubt it after what we saw in the last 12 months ? especially if this is a multi-year secular bear. However we believe at present the best one can get from this market is to try and dissect it and game plan for shorter horizons such as 1 to 3 months until more macro economic data allows for longer term forecasting comfort. This is a market where traders will continue to dominate and thrive (provided you try to capture return both on rallies as well as declines). For the foreseeable future Buy and Hold strategies should be kept on the shelf if one wished to make return.

Look for our full blown reports on the S&P 500 and NASDAQ 100 tomorrow, which will provide greater insight into levels where they rally may peter out.

As always don’t BUY BLIND !! Have an exit strategy before you trade/invest (and stick to it) !!!

The AOH said in a press release Thursday that if CT State Sen McDonald (D-Stamford) marched in the St. Patrick’s Parade on Saturday they would step aside in a silent protest and not march. This was picked up by the local press , including the Stamford Advocate . Even though the Advocate miss quoted the press release from the AOH, the point was made.

This morning the State Senator bowed out of the parade. He tried to say he made the decision prior to the AOH announcement, PLEASE….

Anyway the AOH stood strong and showed their metal….They should be applauded for standing up.

Actual AOH Press Release

(Disclosure: I am a member of the Stamford AOH)

Back to where we started …   As seen in the attached report the S&P 500’s multi-day rally back from the dead has brought the index smack dab backup towards its recently broken support zone near 780 to 740.  This zone of resistance is likely to stall this rally short-term given the fact so much trading activity occurred around this level before it finally gave way.  However we are never one to argue with the tape and certainly the advance/decline stats as well as the up to down volume readings the last two days suggest this market may be able to overcome this resistance easier than we would have previously imagined.

Additionally with AAII Bullish Sentiment as low as 18.92 last week there is certainly enough bearish sentiment out there to suggest investors are under-invested and sideline cash is quite ample to support a continued bear market bounce.  With the quarter ending in just a few weeks we would also imagine that institutional (long only) managers will add liquidity here as to not fall too far behind the market relative return numbers.

If this resistance zone is taking out over the next few days week then the next resistance zone for the S&P 500 would be at 950.

Press Release

The Stamford Division of the Ancient Order of Hibernians (AOH) has asked the organizers of the Stamford St. Patrick’s Day Parade to withdraw its invitation to State Senator Andrew McDonald to march in this Saturday’s parade.  In the event that the Senator McDonald chooses to march, the AOH will step aside from their traditional place in the front of the parade in a silent and dignified protest of Raised Bill 1098, which was drafted and introduced by the Judiciary Committee under Senator McDonald’s direction as its Co-Chair.  Raised Bill 1098 would force a radical reorganization of the legal, financial, and administrative structure of all Catholic parishes in the state, and is contrary to the Apostolic nature of the Catholic Church as well as the Constitution of the United States. 

The AOH is a Catholic, Irish-American fraternal organization founded on May 4, 1836, in New York City in order to protect the Catholic Clergy and Church property from anti-catholic mobs.  The Stamford Division of the AOH was chartered in 1891, and is one of the city’s oldest civic groups.  The AOH remains active today seeking to support and defend the Roman Catholic Church and its mission.

St. Patrick is the patron Saint of Ireland, and for centuries the Irish have celebrated St. Patrick’s Day on March 17^th, the anniversary of his death in the fifth century.   The Stamford St. Patrick’s Day Parade Committee was founded by Hibernians and is operated as a separate legal entity, which is comprised of Hibernian and non-Hibernian members.  As a result of the Parade Committee’s hard work and dedication, the St. Patrick’s Day parade has become a beloved annual tradition in Stamford.  The Stamford AOH traditionally steps off at the head of the parade, followed by the invited elected officials and numerous pipe and marching bands. 

Senator McDonald is the Co-Chair of the Connecticut Judiciary Committee, and under his direction the Judiciary Committee drafted Raised Bill 1098.  As the Co-Chair, he sets the Judiciary Committee’s agenda.  Because 1098 is a Raised Bill it was not proposed by any legislator, but was rather drafted and then introduced by the Judiciary Committee itself.  Raised Bill 1098 is entitled “An Act Modifying the Corporation Laws of Certain Religious Corporations.”  The title of the Raised Bill is intentionally vague, because the only religious corporation it concerns is the Roman Catholic Church.  It singles out the Catholic Church and imposed burdens on the Church beyond those placed on any other religious denomination.  The proposed law would mandate that all Parishes would be run by boards, whose voting members would be exclusively lay-persons, from which Pastors and the Bishop would be effectively excluded. 

While Senator McDonald has issued a public apology for his role in introducing Raised Bill 1098, this anti-Catholic legislation is not an isolated incidence.  In 2007 Senator McDonald introduced Senate Bill 685, which was designed to force the four Catholic hospitals in Connecticut to issue the abortifacient drug, also known as the “morning after pill.”  Despite the strong opposition from the Connecticut Catholic Conference the bill became law with Senator McDonald’s strong support.

It is no coincidence that the Judiciary Committee drafted this proposed legislation that targets the Catholic Church, which has been vocal and steadfast in its opposition to the political views adopted by Senator Andrew McDonald and Representative Michael Lawler, the Co-Chairs of the Committee, who are proponents of abortion rights, gay marriage, and the destruction of embryos as part of stem cell research.

The Stamford AOH is aware of the public reports of threats against Senator McDonald, and denounces and condemns all such threats directed against Senator McDonald, which also constitute a threat to the public discourse that is essential to our American form of self-governance.

Given the role that Senator McDonald played as Co Chair of the committee that drafted and introduced Raised Bill 1098, the Stamford AOH will step off the St. Patrick’s Day parade route parade route in protest of his participation. 

Testing different setups

For the last few weeks we have been talking about the critical S&P 500 support levels and how they are the dividing line between a rally and another waterfall like decline. Well here we are just two days and a very modest bounce removed from a retest of that support and we have already given back 90% of that two day bounce. This is not encouraging given that this feeble bounce came after a 15 % market thrashing over 9 days ! That said we continue to suggest investors watch the support levels on the S&P 500 near 740 as a break below that support would open up a torrent of new selling and maybe a final capitulation.

Anecdotal sentiment the last two days was off the charts bullish as everyone was calling a bottom. One thing we have learned over time and we have repeated this mantra over and over again, bear markets end when even after along-decline investors stop trying to call the low (typically out of frustration of being wrong over and over). For instance on the way down in 2001 and 2002 the bottom was probably called 50 times. However when we hit the actual lows people were super bearish. On the flip side bull cycles end when investors stop calling for the “TOP” and everyone is bullish. Jog your memory a bit and remember the 2000 top. The consensus then after a run from NASDAQ 1000 to NASDAQ 5000 was not that we were at a top but rather we were in a “NEW ERA” and that stocks and the economy would grow forever ! We say this to reinforce the point we need people screaming in the streets to be at a new low and it appears there is more disbelief than fear at the moment.

We expect there is one more shoe to drop in the finance arena. This could create the violation of the support and lead to another hard sell-off and then ultimately the low everyone will then not be calling for !!