Message of the Markets

The Federal Reserve will conclude its meetings Wednesday afternoon with a decision on the Fed Funds Rate. The consensus is the central bank will lower the Fed Funds Rate a quarter point. I cannot quarrel with a quarter point reduction and although I recently called for the resignation of Chairman Bernanke, I think the FOMC has been right on target after a late start on rate reduction and in the Bear Stearns intervention.

Before today, I was leaning toward holding firm on the funds rate as I felt assisting the dollar carried more significance. Inflation, although not the major issue the media makes it out to be, is a factor. A far more important factor is the dollar value versus other currencies and in recent weeks the dollar has drawn a line in the sand. Today, many commodities, leading commodity oriented stocks, gold and oil retreated.

The DOW, NASDAQ and S&P 500 all are positioning to move higher in prompt fashion, possibly much higher. The stock market is a leading indicator and it is signalling that things are improving. See the below chart of the S&P, clearly flashing an ascending triangle formation and about to break higher. A reverse head and shoulders, also a bullish signal, could be argued as well.












The FED will likely be one and done, a quarter point cut and then pausing, before potentially reversing field and hiking rates later in the year if inflation continues ascending. If you are ready to purchase a home, the time is now as home pricing is not falling farther, the dollar is strengthening, commodity pricing is receding, including oil which will lead to increased disposable income for the consumer. Don't let the media dictate your direction, let the market. The psychology is about to change and greed is overtaking fear. People get ready!

Wider is Better

I recognize Detroit is the headquarters of the economic problems we share, complete with inept local governance, but reading through a recent issue of Fortune Magazine (April 14, 2008), I noted a dichotomy which seems a microcosm of the current status of American automakers.

In an article titled "The Flight to Save Detroit", the author describes how Wall Street consultants, lawyers and bankers fly each Monday from NYC to Detroit to work with the automakers in an effort to stop the bleeding. Apparently, there are regulars who have become friendly. It was a nicely done piece.

Thirty four pages later, in a Fortune Joy Ride installment, comes the article "BMW's Cheap Thrill". The article heaps tons of praise on the BMW 1 series and BMW for producing an affordable entry level vehicle. No doubt, BMW has a very high reputation and is certainly worthy of such high praise for they build outstanding vehicles. So does Detroit, but you would not know it.

I think Fortune could have, and should have, easily wrote in Joy Ride about on the outstanding models Detroit is putting out. From the very popular Dodge Charger to the Chevrolet Malibu, Detroit is answering the bell in competing with foreign automakers. There are new concepts, with Buick coming on board with a nice looking new Riviera and Pontiac's Solstice and new G series, and have you seen the new Camaro? Varoom!

Pictured above is my 2007 Pontiac Grand Prix V8 GXP. This automobile, priced at @28K, is the type of luxury sedan anyone short of a hedge fund manager would love to drive. It is very stylish, composed on the wide track chassis for a very nice handling ride and is rubber burning fast. It is ready for the high banks of Daytona. Boogity, Boogity, Boogity!

For the money, this car and many other Detroit models compare very nicely with our foreign competitors, even with the additional costs our automakers incur due to unions disrupting the efficiency in this market. When you make your next vehicle purchase, be sure to check out the home boys before you drop your coin. Hey, maybe you can wait six months for the new Z28, which has gotten extremely strong reviews.

Sooner Socialism

In sports, and in life, it is competition that keeps your fire burning. In a sense, the Celtics need the Lakers, Oklahoma needs Texas and the Red Sox need the Yankees. This is true politically as well, and the Republicans do in fact need the Democrats, or an adequate substitute. The old Democratic Party no longer exists, as it has been high jacked.

Although there were some real questionable cats back in day, like Adali Stevenson, George McGovern, Walter Mondale and Michael Dukakis, there were also members of congress who had common sense and worked for and considered America first.

In the current presidential election, it appears the Democrats will end up putting forth the most liberal member of the Senate, who is essentially a community activist, one who associates with some real scary folk. Although he is first term US Senator, he has been running for President for at least two of the three years he has been in congress, leaving him with little experience on the national scene.

As I take note of the rhetoric of the party leaders these days, I see defeatism with respect to the global war on terror, an erroneous attitude towards our enemies reminiscent of Jimmy Carter, income and wealth redistribution, the idea of free healthcare for everyone and an economic policy bordering on socialism, complete with the raising of taxation on capital gains “due to fairness”.

I recall John F. Kennedy famously putting forth “Ask not what your country can do for you, but what you could do for your country”. That thought has our citizens competing with another for jobs, in job performance and providing service in the community when able, which gives us a good sense of being. Competition brings out the best in us, and if we fail, we learn and persevere. The new Democrats apparently seek the opposite of what Kennedy sought, having the country provide for you through socialist programs, thus killing American pride and spirit.

I don’t recall the OU Sooners giving Texas a few touchdowns “in a sense of fairness”. If I am a Longhorn, or an American, I would not want them to!

By the way, is there a spot waiting for JC Watts in the McCain administration?

Earth Day Advice

In the event you were under a rock and did not get bombarded with the onslaught of news proclaiming the arrival today of Earth Day, let me inform be the first to inform you. You would think, given the media coverage, this is at the forefront of every ones mind. Election exit polling suggests it is not. The media coverage of global warming, or, excuse me, global climate change, is astounding, given that so much is unknown at best. Much of the presented facts have been disproven, and scientists in disagreement are not given equal airtime if they are not totally erroneously discredited.

America is buying it hook line and sinker. On CNBC's Squawk Box this morning, The CEO of Nissan, Carlos Ghosn, spoke of a shift in tastes in new car purchases which he sees continuing. Many of these vehicles have fallen short it turns out with respect to battery life, and since the batteries are more expensive than the remaining economic life of the motor skate, unsuspecting buyers may be left upside down.

Although much of the commodity boom can be traced to speculative issues surrounding the fall of the dollar, ethanol production is negatively affecting corn and wheat production and pricing, and this may soon impact pricing with respect to beer, which is going to be a real problem.

The bottom line is Al Gore has become a millionaire several times over firing this propaganda at us and the media is in full assistance mode. The founder of The Weather Channel thinks global warming is a joke. I have taken a handful of meteorology courses and have no idea but I think everyone should take a chill pill.

Certainly, contrary to popular belief, there is not enough proven consensus to spend precious billions of tax dollars on a what if or what if not junk science. What I do think is that you should recycle when able, that polluting is not an option (this includes all you smokers tossing your butts out your car window which really pisses me off) and that you should make an effort to leave this great land in better condition than you found it. Spock Out!

The Resurrection Begins

A crowd of 80,149 attended the culmination of spring practice, known as the Red-White game, at Lincoln, NE Saturday. The record crowd came in part, to put behind them the past regime and welcome the new, or old, Nebraska back.

As the days go by, we seem to learn how deeply the Callahan era fractured the base. Former Heisman Trophy winner Eric Crouch recently commented how he could not get in the front gate at the football offices. New Coach Bo Pelini has an open door policy, citing that the former players helped build this place. Of the day, “It increases my sense of responsibility toward the state" said Pelini. “It’s a beautiful day in Husker Nation, isn’t it?” Indeed it was! GBR!

The Tax Man

Ronald Reagan once made some commentary discussing the merits, or lack thereof, of a potential Mondale Administration. "We see an America in which every day is Independence Day, the fourth of July, but Democrats believe every day is April 15."

The Democrats, and their presidential candidates, obviously still do,
as Hillary Clinton proclaimed, "We cannot afford all my ideas", and our citizens continue to pay for it. So, as you dig into your wallet, here is some entertainment from the greatest band of all time for your listening pleasure. A George Harrison composition off the 1966 album Revolver, The Beatles!

Happy Hour!

General Electric (GE:NYSE) gave the market every reason to sell off hard today, missing guidance and lowering estimates going forward. In addition, they appear to have been less than forthcoming with the analysts who cover GE.

I think a real problem with GE, outside of the market turmoil everyone is in, is the NBC news division. Day's Of Our Lives and CNBC are great, but the news division has taken a hard left turn and this is no doubt turning off viewers in droves. A reported alliance with billionaire George Soros, David Brock and Paul Begala to push the leftist agenda in this political season is not welcomed activity.

GE is a heavyweight on the DOW and is responsible for much of todays volume on the downdraft. Even with the selloff, volume eased on the NASDAQ, and if you exclude GE, the same would have occurred on the DOW. Both are parked at the 50 day moving average.


Although technically a distribution day on the DOW, I discard it due to GE and proclaim the rally is still intact as market action dictates.

So, I am heading to Happy Hour. Can't make the Bulls and Bears today, so Chilis will have to do! Bottoms Up!

Is Your Powder Dry?

It seems rather clear a base is being set up here which indicates the markets will be moving higher sometime soon. The 50 day moving average on the NASDAQ Comp, shown below, has drawn a line in the sand and seems ready to turn higher toward the 200 day. Market action, with respect to price movement versus volume, has been better than expected since the rally attempt began prior to Good Friday.

Richard Russell, editor of the DOW Theory Letters newsletter, indicated this week that he believes the bull market, which began in the early 80's remains intact. To get more in depth, read about it at MarketWatch.com.

It is tough to go against the onslaught of media coverage saying otherwise, including predictions of the second coming of the Great Depression, but I let the tape dictate my interpretations. With a potential ascending triangle at work in both the NDQC and the DOW, I have a sneaking suspicion Mr. Russell is right on target. The tape tells me that, until I see market action showing otherwise, the bottom is in and the market will continue to push higher.

Prognosticators are correct as there is in fact a second coming heading our way; the return of Led Zeppelin. Ramble On!

'Noles Admin On Slippery Slope

I have been busy of late and must have missed the formal announcement up at Florida State University. The Seminole Athletic department informed us that FSU radio color commentator Peter Tom Willis will not have his contract renewed after 9 years of work along side veteran play by play man Gene Deckerhoff.

PT, a former FSU QB, was no Vic Prinzi, who we all miss, but he was special in his own way. Immediately upon learning of his "firing", the Warchant.com message board and various blogs went straight back to comments PT made regarding the performance, or lack thereof, of the Seminoles in recent years.

PT at one point called the offense a "high school offense", something everyone including the dog I don't have knew. It seems the FSU higher ups did not appreciate it. Well, I don't appreciate getting whacked 30-0 by Wake Forest at home, or going 7-6 every year, which includes a very sad performance at Florida this past season.

It seems the FSU administration is really beginning to make some poor decisions of late, and if they are not careful, it might be time to replace them.

I could not be a bigger fan of Coach Bobby Bowden, and his value and contributions to this university are unparalleled. Statistics bear out it is not speculation that the offense has grinded to a halt in recent years and for PT to be booted for stating the obvious, which I gather he was, is rather sad.

I will miss PT in there with Gene for sure. Can't wait until he speaks to our club again. Thanks PT, I see ya!

Keep The Shiny Side Up

During qualifying Friday afternoon for the Samsung 500 at Texas Motor Speedway, one of the most violent and scary crashes took place as rookie driver Michael McDowell lost control of his No. 00 Toyota Camry and proceeded to post one for the record books. McDowell, a member of the team at Michael Waltrip Racing, incredibly, got out of the car and walked away.



"For me to walk away from that wreck is unbelievable," McDowell said. "I'm going to count by blessings tonight and thank God for this opportunity to walk away from that wreck."

Since the death in 2001 of NASCAR legend Dale Earnhardt, NASCAR officals began implementing many safety oriented changes. Certainly, the three most notable changes all played a pivotal role during Friday's crash: the safer wall (The Steel and Foam Energy Reduction wall), the HANS device and the car of tomorrow (COT).

The safer walls, developed by a team led by Dr. Dean Sicking at the University of Nebraska, consist of foam inserts between walls to absorb energy at the time on impact. The results of this are easily witnessed in the crash video.

The HANS Device prohibits the drivers head from moving much during such a crash. Most observers feel this device could have helped Earnhardt had it been in place.

The controversial COT is no doubt being applauded in the garage area this weekend. Although there are problems with it, from being bulky and more difficult to drive and handle for the drivers, the safety of the car cannot be questioned. The COT is taller and wider than the previous car, and the driver is positioned more in the middle to lessen the impact of driver side contact.

NASCAR has been having a rough go of it of late and many of the problems are self inflicted. From changes in the garage, to commercialization to leaving heritage by closing tracks like North Wilkesboro and North Carolina Motor Speedway, the change to the COT must be considered a success, particularly if safety was among the most important reasons. Safety was a top concern, and I think everyone, especially Michael McDowell, is thankful for it.

Confirmed Rally

Friday is a big day on Wall Street, with the jobs number being released at 8:30AM EST. I do not expect this to be a favorable number at all. In fact, good news is hard to find on the financial pages, unless you check the recent movements of the DOW and NASDAQ.

Given the high level of pessimism, the market has been acting good of late, with high volume up days and edging down on lackluster volume. This type of market action is exactly what you want to see if you are a bull. Whether the market explodes to the upside or is in stair steeping ascent (preferred) remains to be seen, but market action suggests the bottom is indeed in and it is forecasting better things ahead.

As indicated in a previous post, Wal-Mart(WMT:NYSE) has broken out to a four year high, which I consider powerful. I find it difficult to visualize the economy is continuing to sink while the worlds most powerful retailer is striking to new highs.

After the jobs report, should we survive the day without compelling volume on the downside, it will be a significant sign going forward for the economy and the corner of Wall and Broad. I think the rally will stay on track, at least for now.

Global War On Terror: Domestic

Amidst all the discussion of terrorist activity abroad, and there is plenty of it, what is often absent is a discussion of home grown terrorists. FOX News recently ran an hour long special, hosted by the talented E. D. Hill, dealing with the subject.

Home grown terrorists are particularly dangerous and difficult to identify. We can reflect back to Waco and consider militia types, but the one common denominator for these folks is a hatred for America. Many are sitting ducks to be approached by foreign influence to help conduct an operation, and although there is scant media coverage of it, the signature event in this regard is the bombing of the Alfred P. Murrah building in Oklahoma City in 1995.

If you are a conspiracy theorist, this has all the bells and whistles. In an interview on The Glenn Beck Program, I first became aware of the work being done by Jayna Davis in her book “The Third Terrorist”. Evidence in her book is exhaustive and most compelling, and I strongly encourage you to read more about it at her website at http://jaynadavis.com/ Ms. Davis was at the forefront putting these theories on the national stage. Please review her interview with Bill O’Reilly on The Factor below:



There are several folks in high profile positions who have high regard for her work, including the aforementioned Beck, former CIA Director James Woolsey and US Congressman Dana Rohrabacher (R:CA). The Wall Street Journal also chronicled the events she uncovered in an editorial piece.

Ms. Davis advanced the intelligence community terminology “lily whites” in a labeling effort to show the terrorists may in fact be right amongst us and not easily identified. From the snipers in Virginia to the American Taliban, those who awake daily wishing harm on America come from near and far.