2/4/09 (Sheeple, Obama Caps! Disney, MET!)

Traders,


We had a decent rally to maintain those supports – additionally the RUT is holding that 450 pivot very well. We could see some follow-through – but the push-pull in D.C. with negative economic news continues to keep the market from making any solid action – in either direction. We seem to me stuck in a range and until some definite news or decisive direction comes out of D.C. – then I think we could see less statistical volatility, however – that does NOT mean hidden volatility is ramping – it certainly is.

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Constitutional Issues

Yesterday I shared with some of you some information about some New Hampshire legislation (not voted on yet) to address state right’s issues – in the face of challenging executive orders or congressional mandates. It was interesting that it addressed several topics, from 1st and 2nd amendments – as well as draft, marriage, and others. I shared it – because it is rather concerning since many states face economic hardships and will be looking to the Fed for a bailout – I think at the same time they don’t want to be “black mailed” or the use of extortion in a tit-for-tat display (we’ll give you the money, but you need to xxxxx) – which is what politics is about – deals. The problem – which I think NH is trying to get in front of – is being able to make deals, but have proactive legislation that would bar them from being pushed around too much. The issue that no one seems to care about is – our rights – we the people. I guess we forget about that – us sheeple usually don’t care unless it directly effects us.

I did get some feedback yesterday – everything from – I worry too much to no big deal. I was rather disappointed that those that did share did NOT either seemed alarmed, care, were worried, or it didn’t really mater. Maybe I care too much… who knows. What I do know that it only took a 2 cent tax on tea and a small pamphlet by Paine to get people up in arms. Decades later it only was a small excise tax on moonshine that almost lost Washington control of the U.S. – I guess we as a nation have become too FAT, DUMB, and HAPPY to give a sh#t. More people were interested in the Super Bowl than give a rats a$$ about the economy.

Sure we had record turnout for votes and Obama won – but that was as much as it was about hatred for Bush as it was for the hype around Obama. Our job as the people of this country doesn’t end with a Vote. Voting is like those pseudo-Christians that only go to church to rid their guilt, so they can commit their sins again over the weekend. As if Voting is all you need to do and then you go back to yoru lazy-boy and flick on the TV to watch the next episode of LOST.

Hopefully – I pissed enough of you off (if you even bother to read this) to care or speak up. This nation and the people of this nation are getting shafted and no one really seems to care – I guess the sheeple of this country richly deserve everything that is coming to them – be it socialism, nationalism, or a collapse of the currency.

Sorry for the rant – but some emails that I got just made me cringe.

http://www.gencourt.state.nh.us/legislation/2009/HCR0006.html

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Obama Caps Exec pay to $500k

Obama is announcing today a cap on executive pay ($500k) for those companies that get the most aid from the government. It is really unclear at this time what that really means or how it affects stock options, future pay, future bonuses, golden parachutes, or existing deals. No doubt it is the popular thing to do, but the irony is these are (and probably will be ) the same execs he is going to for advice.

It is hard to say how it will affect companies, certainly it could boost perception and made give a boost to stock price in those company. Again the irony is that a stock might get a rally because it is getting aid from the government because it could go out of business – but the executive pay has been capped. Silly – but perception is everything – or so it seems.

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Disney getting hit

Disney is getting hit on all fronts, theme parks are off (note they raised prices to compensate), ad revenue is down on their networks, and the film studios are seeing short falls. Profit came in at 41 cents a share (20% less than expected). The stock got smacked in after hours trading and is looking down over a dollar at the opening. They are seeing some serious crunch time and they are certainly in the WANT and not NEED category for individuals spending money. As credit lines are tapped out – fewer consumers will have liquid cash to spend on merchandise and the theme parks. Hopefully they can off-set that with their TV (but ad revenue is down as well) – maybe it’s time to bring out some of their old movies on Blue Ray or something. Don’t look for Disney to be a recession stock play – it certainly is not.

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MET beats estimates

MET life beat estimates – but that was the rumor on the street over a week ago – and we saw the stock rally from the high 20’s to the low 30’s. Now the news is out and while it did see some hyper volatility – it looks like the early money already came in and out to capture any profits on the move. Stock is mixed in the pre-market session.

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Futures Pre-market

The futures are up – close to fair value. They had been off earlier. It doesn’t look like too much ARB play in there – so expect a mix opening.

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Support / Resistance

INDU 8000 / 8500 (We got above the 8000 line – which I was calling support, even though the market had closed below it. It looks like we could see a small move up at the opening. But watch the 8k line and the close.)

NDX 1100-1150 / 1200-1250 (We closed in the resistance band – above the 1200 line which is the lower end. There is some volatility in here – but the range seems to be 100 points)

SPX 800 (850) 900 (We are below the pivot point still – even with the slight upward move yesterday.)
RUT 400 (450) 500 (The boarder RUT can’t get away from the 450 line – it’s like a magnet for now – anyway)

YG 850 / 950 (I am a buyer in the 800 range for sure. 850 looks to be short-term support.)

SI 10 / 14 (I am a huge buyer at 10 or anything below that. I think we could see 20 this year.)

CL 35 / 45 (Again – 35-40 is a big support area as the need for future hedges pick up – at these prices it is a long-term locked in steal, in my book anyway.)

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Conclusion

Sorry about that rant, but I see these as changing times. People were fired up about the Patriot Act and even Guantomino Bay – but now it seems that everyone is just laying down. I can tell you on a local level – it is hard to get anyone’s ear for sure. They “hear” you, but they don’t “listen” – let alone do anything. It is crunch time at the local, state, and federal level – the problem is that on the federal level they can’t print money faster than a pole cat in a hen house and no one can or will say anything about it. I think hidden inflation is building and when it comes – people will act shocked as if they couldn’t believe it, just like the housing bubble. To me I am amazed that people couldn’t believe the housing market was going to collapse – I guess they just ignored the math. Well – ignoring the math when it comes to the dollar will be even a bigger pop and you should not be shocked when it comes. It is certainly not IF, it is only WHEN.

Of course you can ignore it and go back to watching your favorite TV show or enjoying next weekend’s party – but please take the time to seriously think about your future, the dollar, and your RIGHTS. This nation is sure loaded with lots of sheeple.