Nice to see the Brain Trust catch up…Plus “The Scott Bleier Show” free?

As most of you know, I do a live morning video show every trading day. What it lacks is the polished presentation of costly live cable TV or taped market-oriented shows like on Yahoo Finance. It is unscripted, has no guests and requires you turn turn the volume down as I am routinely loud in my daily presentations. But in spite of the lack of a “polished presentation’, viewers insist the show is worth it. You get a non-bullshit analysis of where the market’s are, how we got there, what it means for today and a look at stocks that viewers are interested in along with actionable market timing. In addition, I often rant on economics, fundamentals, technicals or any pertinent market-oriented topic, though most recommended stocks and important buy/sell/stop levels are saved for full CreateCapital members. You’ll seldom hear about the non-market stories of the day because I just don’t care about them, unless the market does. Personally, I think the show pisses on anything else out there, but I’m biased.

The Scott Bleier Show was initially free to all IBC visitors, then I took it private late last year. But Dr. Le Fly recently mentioned to me that he missed the show in the morning. So I will soon be broadcasting the show free, for a very limited time, in the near future. Stay tuned for details.

During one of my more sticky morning show rants, I had been talking about how Dr. Bernanke was actually marching the economy towards a significant economic slowdown. In his effort to liquefy banks and prop-up asset prices and the stock market, he was assuring that an economic disaster would bring the QE experiment to an end. The rise in commodity prices that the good Doctor takes zero responsibility for, is creating true demand destruction. Maybe the distortion and levitation of asset prices is more important than anything else. Perhaps “trickle-down” economics is the cure to our issues, but I sincerely doubt it.

 As often happens, the powers that be are fighting the last economic crisis, not the current one. Continuing to pour free money into the closed-loop of the banks and markets has created unprecedented distortions in those markets and has choked the rest of the economy. Only now are we beginning to see respected economists and pundits “that matter” seize upon this concept. These are the same prognosticators who beg for and depend on monetary stimulus.

The equity market has now recovered virtually all of what was lost since the Credit Crash. Some indices are at all time highs. There is a significant “inflation” in equities and the Fed can claim “Mission Accomplished” as the market participants (lemmings) are doing exactly what Dr. Bernanke dictates. But major warning signs are everywhere. Precious metals are parabolic. The Dollar is testing all time lows. Oil prices are prohibitive. Speculative excesses have reached every corner of the “free market”. Deeply cyclical stocks that usually lag the overall market and historically trade at a significant discount, are leading the market higher. All this is happening as asset prices are in the demand destruction zone and that a major portion of the artificial stimulus of QE is ending.

After more than two years, the trend of a constant market bid and the dependability of the Bernanke Put are stretched to the breaking point. The last two weeks of trading has seen another big one-way up spike in the market. It seems to be expected and no big deal. Imagine what will be said when a downtrend is established? You’ll hear all about how awful the economy and everything else is. Then I guess we’ll get more market stimulus, again, until the rubber-band between the financial complex and everything else finally snaps. Then what?

CEDC. Need I say more? And UMC is in an attractive buy zone with earnings coming Wednesday…Est. .06

From CreateCapital/Createcoin Premium

As semiconductor stocks find new buyers, look to Taiwan as a surrogate for Japanese production. Plus this stock is very cheap, holding a long-term uptrend and making a terrific “W” pattern bottom. But beware, this is NOT a momentum favorite. From CreateCapital/CreateCoin Premium Service.

So, we were greeted on Tax Day with a market mess. Surely it couldn’t be so obvious that the day the last bit of your retirement money gets put to work, the market would tank. The reason? S&P; you know them. They downgrade stocks at the bottom and upgrade them at the top. They put their AAA stamp of approval on what are probably fraudulent CDOs and other derivative instruments. Nevertheless, they downgraded the “outlook” of the debt of the United States. Shocking! Sacrilege!

But the markets, in their infinite wisdom, chose to ignore the big volume selling and race back, on low volume, in just a few hours. Just like it has after every sell-off during the past two years. Except for the selling that occurred during the space between QEI & QEII or course.

In my Tuesday morning video show, I stated that the market is going to test its highs next. I said it without equivocation. But I didn’t expect it to happen in one trading day!

Today the market began with a mirror image of Monday morning. Almost every stock gapped up and lifted 3, 4, 5%+ on no news and little volume. The reason? The Dollar Index (DXY) lost 1.8% since Monday, so everything priced in dollars is worth more. It has been the causality for over two years and it is as strong as ever. BTW–it won’t work on the way up as well as it works on the way down. The bottom line is that investors around the world are programmed to buy anything and everything as the dollar falls. Is it good for America? Who cares? Certainly investors don’t.

So today the market is racing up huge. Monday’s 90% down day is negated and replaced with a 90% up day. As long as the markets are running, nobody cares about the budget or deficits or politics. Precious metals are reaching new highs. The world is awash in oil and there is nowhere to put it, yet oil nonetheless continues higher. Financial companies like banks continue to disappoint yet markets don’t care. I could go on and on, but we all know what is happening and it doesn’t matter to the market, until it does. 

After today’s action, many cautious Money Managers will give up. Any doubts about anything are being forced out and any money will be put to work. The clear conclusion is that with everything happening, there is nothing that can hurt the market. Sure QEII ends soon but it is not stopping the gains. That is the perception.

Some see the technical picture as a reverse head and shoulders pattern, indicating more upside. Others see a double top. I see a double top but my guess is that we are on our way towards making a marginal new high. It will look like a breakout but it will fail, reverse and take us back to test SPX 1300. Then lather, rinse and repeat for now. The Chinese may be tightening, but not us. While the world is awash in liquidity, almost nothing else matters.

Option expiration. Taxes due. Retirement account contributions due. GDP estimates downgraded. Potential government shutdown. End of Quantitative Easing. Last month of POMO. Earnings season. Earnings estimate downgrades. Gold and Silver prices.  Commodity prices. Gas prices. Food prices. Value of the dollar. Renewed European crisis. Worldwide radioactive contamination. Shuttering of the Japanese economy. Multiple Middle Eastern revolutions. Housing inventory. Bank balance sheet black hole. Mortgage legal mess. Technical double top. Negative divergences.

What have I forgotten?

All this means is the market will take this last bit of POMO and make a new range high, cementing the bullish extreme before a long, hot and rough & tumble summer.

Don’t you find it amazing that literally one trading day after certain FED Jawboners said that commodity inflation will be “transitory” that commodity prices are coming off, hard? So what happened? Why are they dropping after an unrelenting climb?

Our friends at the Federal Reserve know exactly what they are doing. They picked up the pieces of a broken system over two years ago and have been firmly in control ever since. They continue to fear the natural deflationary forces at work because it will hurt those with capital, and that status quo must be protected at any and all costs because they have already bought and paid for our wonderful elected officials. Our system is based on that high-level corruption and that may never change, so get used to it.

 By running commodities and inflation, people (and machines) actually believe what the market is telling them–like it was the old days. And why not? “Investors” make out like bandits and get wealthy, and the hope is that it will all “trickle down” as Art Laffer would say. Except this time the only thing trickling down are higher prices for the things we need to live. Certainly there is no spreading of the wealth effect this time around, so after a record setting run the FED finally decides that commodity prices are too high and they will hurt the economy. Then the Goldman Strategist lowers his GDP estimates again and the market sells off. This sell off takes some of the pressure off normal folks who use commodities to eat and travel as opposed to rank speculation. 

With the end of the IRA/401k money this week and barely one month of QEII left, the market is either simply undergoing a countertrend move or has reached a major inflection point. Without the direct injection of funds into the market via QE, the question is if the FED will still have the kind of control over the hearts and minds of “investors” who have been following their lead, no questions asked. Just look at the various charts of equity and commodity performance and their correlation to FED purchases of Treasuries through QE. Are you surprised? 

The market’s recovery after Japan and the giant “V” at the top of a multi-year uptrend has brought a giant sigh of relief from investors, “proving” how bullet-proof the market is. That is why there are only 15% Bears. But the double top is there. The Candlestick “Evening Doji Star” is almost fully formed. QEII is almost done. Technically, this year looks just like last year (my sole prediction for 2011). Do you think the economy will speed up later this year? Do you believe the geniuses who tell you that oil prices don’t matter to the economy?

The markets have already embarked on what may be the long and dulling pain of an extended trading range with the lower portion of that range yet to be defined. First $SPX support is here near 1310. Then lower.