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What a week this has been. We kicked off the week by having the President of the United States proclaim that this is “A New Season In America”, and I am definitely not going to disagree with him on that. The question is, what’s new for American investors?

  1. Healthcare Reform = higher spending, higher state level deficits (don’t take my word for it – 14 states filed suits against the government for a reason)
  2. Municipal Bond Market “Bid Rigging” is being thrown onto the mat while the SEC’s Greenberg (Muni-unit) sues PA non-profit hospitals for fraud
  3. Insider Trading rings get plastered all over the tape, but at the same time Bernanke’s elixir of cheap money has the 2007 LBO rumor mill picking up speed

The Treasury Bond market is getting crushed; interest rates are breaking out to the upside; and I wonder what all the folks in China and Japan holding $1.6 Trillion in us promises can trust in all of the aforementioned spending and storytelling.

In the chart below, Darius Dale accurately pinpoints that American Consumer Confidence nudged up from the preliminary University of Michigan reading from earlier this month. That said, confidence in this country continues to make a long term series of lower-highs.

Maybe Americans aren’t as naïve as their politicians deem them to be. Maybe they don’t buy into the CNBC mania of evaluating a America’s health on the tick of the stock market.

‘Tis a new season indeed.

Our immediate term support and resistance lines for the SP500 are now 1157 and 1175, respectively. We have been making sales in the Virtual Portfolio all morning into this hopeful stock market strength. Hope is not an investment process that we adhere to.

KM

Keith R. McCullough
Chief Executive Officer

Confidence: Is It Really "A New Season In America?" - CConf1