Let’s Pull Back the Curtain, and See Who's REALLY in Charge?
I know I sometimes complain about people that call a “Christmas Tree” a “Holiday Tree.” And I complain about the school in the northeast that didn't want to offend anyone with St. Patrick’s Day, so they changed it to Happy Green Day. And while incidents like these drive me crazy, there are real questions brewing as to Who’s Driving our Country’s Ship?
Leon Panetta is our Defense Secretary under Obama. While his background shows he was in charge of the CIA, he really does NOT have a military background. As you know, the Middle East is a powder keg, with the Iran vs Israel tensions – along with all of the religious factions that always seem to be warring with each other. When asked about our possible involvement in Syria, Mr. Panetta said that he'd “go to the UN to seek legal authority for any military strike on Syria, and would come to Congress and inform them.” Now that caused Congress’s jaw to drop (and my own) – as to why Obama would seek the approval of the UN to go into Syria versus the U.S. Congress. When asked that very question, Mr. Panetta didn’t waver and cited a UN agreement document that President Truman signed in 1945, called the United Nations Participation Act. In it, there's language that says the US President doesn't need Congress to get involved in military operations the UN deems allowable or necessary. This stinks! It’s really just like General Smedley said so many years ago, "War is a racket, with untold profits for the right people. Power and money, it's a big time combination and no silly piece of paper is going to stand in the way of either.” Unfortunately, it's no longer “Holiday Trees” and "Happy Green Day", we have escalated to the reality that we’re allowing the governing body of the UN to decide when OUR soldiers are going to war.
So I posed the question: Who's Really in Charge? You may have thought that it was the people who lived in the US, and who would come together to try and make logical decisions. Yet more and more we see the voice of the people simply slammed shut. Appointed officials that were NOT voted in, get to make huge decisions that affect YOUR life. And it’s the little decisions that – when left unchecked – cause a domino effect on the 7 Billion (rest of us). It’s not just 5 guys in a smoky, back room. It’s not just Wall Street or The Fed. I am forever reminded of a line – delivered by Hal Holbrook – from that movie: All The President’s Men: “When in doubt, follow the money!”
The market’s going up – what’s the problem? The problem is that it shouldn’t be (but it is) so don’t fight the tape! Our only question is: “How far can it go without a correction?” The market was set-up for a big correction a while back, and they punched it through a resistance level on low volume, effectively setting a new level of support and muting the correction. Right now we're sort of in "no man’s land". But there’s something brewing out there and it could be nothing – or it could be something indeed.
There is a Greek CDS (Credit Default Swap) auction on Monday. Now, in the past two weeks we have seen the head of Goldman Sachs European derivatives department quit and complain about GS. We have had the head of the CME (Chicago Mercantile Exchange) "retire" and interestingly back away from being a Clearing-House in Europe. Could these moves mean that they see a lot more trouble coming out of this auction than anyone really expects? I don't know, but it's something to consider. Think about it for a moment, we had Greece default – which has cost many tens of billions of dollars and yet the situation is not solved. Now we have the Greek CDS auctions, which although confusing to many are nothing more than "bets" that were made that Greece wouldn't blow up. And now that it has, the underlying paper isn't worth what it was – so they’re going to auction it off to see what it’s really worth. To quote one head of a sovereign CDS trading firm: “The Greek auction will be an experiment because there's never been a default with such a large amount of bonds outstanding, and it's the first time we're going to see open interest to buy or sell bonds of that size."
So my point is simply this, some high level folks that would have been directly involved in this have left. Some people fear something of a domino effect out of this and frankly that "could" happen. There's nothing really to prevent it. Therefore, I have had reason to worry about the latest gains in the stock market because of this. And, it’s not uncommon for the market to "build headroom" so that when bad news hits and the market falls, it doesn't take out major support levels. This could be what we’ve been seeing for the past weeks as we’ve crossed up and over the S&P and DOW resistance levels. Again, I don't know, but I tend to think there is a smoldering fire out there somewhere. Therefore I’m wondering if early next week we’re being set up for a smack down. I'm hoping not because we've been leaning long into this run up and I don't want to give back those profits.
Now what if we get past the auction and everything goes without issue, do we just keep climbing or do we ‘sell the news’? I can see many reasons for the market to slide, and only one for it to continue higher. Unfortunately the "higher" option comes from bogus economic reports, Banksters using Bernanke money to inflate the market, and Obama smiling about how great things are. We have more technical and fundamental reasons to be seeing a falling market. But we have a President who wants to point to a rising market as proof he's doing a good job. That means there is stimulus behind the curtain that we are not even aware of. Honestly, that is a tough war to predict the outcome of!
Please keep your eyes and ears open for news on Monday about the Greek auction, it could be market moving.
We’re currently holding:
- ANF – in at 50 (currently 52.47) – stop at entry,
- CTXS – in at 76 (currently 78.20) – stop at entry
- GLD (ETF for Gold) – in at 159.49, (currently 161.05) – no stop, AND
- SLV (ETF for Silver) – in at 28 (currently 3169) – no stop.
To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm.
Please be safe out there!
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