Has The World Had Enough Of Governments?......Market Has!....

Stock-Markets / Government Intervention May 15, 2010 - 04:35 AM GMT

Best Financial Markets Analysis Article When Governments start to intervene on everything maybe it's time for them to stop. Maybe the stock market is sending a message that it has had enough of their constant interference. The Government is trying to make the world pay for others discretions. How many more taxes can they create so we can pay for their bail outs for those who deserve to fail? How many innocent people have to lose their jobs because the Government puts undue tax burdens on corporate America and corporations around the world that will force these corporations to fire employees? At what point does the pot runeth over and we have more than we asked for? Will there be blood on the streets? Riots such as those that we saw in Greece right here in our back yards!

The Government interfered with Visa, Inc. (V) and MasterCard Incorporated (MA) today and killed those stocks. If they kill enough of their business, how many will be forced to lose their jobs? The Australian Government decided to burden profitable coal company's with a 40% tax on their profits. How many will lose their jobs because of that? On and on it goes. Bailing out those who don't deserve it and hurting the innocent along the way is pathetic at best. Tax our gasoline. Tax cigarettes. Tax food. Tax, tax, and tax some more so you can use that money to bail out those who don't deserve it just to save your own hides. How pathetic. There's no end in sight either. The market is telling us it doesn't like it either. To be blunt, it makes me sick. It's all self-serving nonsense. About their own political future. Prop things up long enough to get back in office. We'll deal with the tragedy of it all later. Doesn't matter who we hurt. Just get in!

Commodity stocks are the first to be entering a bear market here. Many of these commodity areas are breaking below their 200-day exponential moving averages which are where bears officially begin. They've done classic back tests and are gapping down off those failed back tests. Again, classic bear market action. Break down. Back test over a few days or weeks time and then gap failure right back down. Oil was the first to enter in to a bear market and I thought that was interesting but now I am seeing more and more stocks such as Freeport-McMoRan Copper & Gold Inc. (FCX) break down, back test and then gap break down again. This is a sign of deflation. Loss of demand. Loss of pricing power. can you say more job cuts? You bet! When copper (FCX) starts to break and we see lumber crushed the past many days, this is a sign of deflation. of a loss of demand. Of economies halting. Not good that many areas of the commodity world are breaking down here. Is the rest of the stock market far behind? We'll know soon enough.

Another warning sign is when a market loses its 20- and 50-day exponential moving average and then back tests it and fails in a fashion such as we did today. Huge gap down which isn't the best of behaviors. It's not a break below the 200-day exponential moving average and the bulls can be thankful of that but it's not good to see our markets fail to this intense degree off a simple back test move to those 20- and 50-day exponential moving averages. The last vestige of hope or the final line in the sand for the bulls is 1102 S&P 500 where those 200's sit waiting for yet another test. If we get another bounce of this level and it is weak in both price and on the oscillators, get ready for something the bulls dread and the bears will celebrate over. It could get very ugly very fast, especially if we get a classic light volume back test of those lost 200's. The story isn't written yet and we have not entered a bear market here but you can see by the behavior of our market that it isn't happy with all this intervention by those who shouldn't be interfering. They are killing our own economy by bailing out those who are undeserving and the market knows this means less profits (earnings) are closer at hand than we'd like to believe since all the stimulus just made things look so rosy. The action today didn't do wonders for the bullish case.

Look, failures of big banks and countries aren't a good thing. I'm not saying it is. I am saying that you can't protect that which is not worthy of that protection. You can't make the world a victim of these problems that are created by others. Sure it's not good. Sure it causes an immediate shock to the system with massive layoffs, etc. It's sad and terrible, but you don't want to go making a bad problem worse by hurting those who don't deserve it. It's time to let everything fail that needs to. It's time to stop interfering. It's time to let the markets do what they need to, whatever that is, as long as it's based on truth, and what is, and not based on propping up and creating a false sense of well being. Country after country has entered in to a bear market and is tired of what it's seeing, and it appears we're on our way. I don't think these Governments will ever do what's right until they're forced to through enough human dissent.

We are on the precipice here of entering our own bear market and joining the world in that misery. It'll hurt the masses terribly of course through losses in 401k's, etc. Loss of jobs will increase as will foreclosures among other things. However, all hope is not lost. We have yet to lose 1102 with force. Only when that happens can we say we are in bear market. Today's action didn't help the bullish case but for now all we've truly done is move down off the top of the base and those 20- and 50-day exponential moving averages. The next few days will tell the tale. Let's hope the markets find a way to recover before we break down. If it does we will play accordingly.

Peace,

Jack

Jack Steiman is author of SwingTradeOnline.com ( www.swingtradeonline.com ). Former columnist for TheStreet.com, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

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