One of the items I read today came courtesy of our own Fed (hat tip, Jesses Café Americain) which is linked here to disgust you since therein is a list of insiders who will receive information you can’t get. Further, what they’ll suggest will be to advance their interests which may not be aligned with yours.

Then there was all this crowing about (gosh—surprise surprise, he made a lot of money on GS) Warren Buffett who later advised investors to buy, buy, buy. If you were Buffett and got a briefing from both GS and the Treasury secretary on bailouts and the like, you’d probably make that GS investment yourself.

Then there’s another taxpayer rip-off courtesy of Obama Bonds as noted in this Bloomberg piece. I asked my bond trading buddy, who I trained in the late 1970s, what he thought about these and this was his email response:

“As for the BABs.....it is but one more example of market dislocation that occurs when politics trumps economics. It is a phenomenal opportunity for investors, and they are taking full advantage. It is truly a transfer of money from the taxpayer to insurance companies and pension plans ( the main end-users). I have sold many millions of them, and it has done more for my business than any other single product I can remember.

It seems that this truly is a zero-sum world. With the creation of BABs, the government has given me the additional income that I will probably need to finance my "medical vacations" to escape their health care mess!!”

Then from Paul Kedrosky’s Infectious Greed blog comes this salient piece regarding the BS surrounding earnings estimates and cheating analysts:

“We document widespread changes to the historical I/B/E/S analyst stock recommendations database. Across seven I/B/E/S downloads, obtained between 2000 and 2007, we find that between 6,580 (1.6%) and 97,582 (21.7%) of matched observations are different from one download to the next. The changes include alterations of recommendations, additions and deletions of records, and removal of analyst names. These changes are nonrandom, clustering by analyst reputation, broker size and status, and recommendation boldness, and affect trading signal classifications and back-tests of three stylized facts: profitability of trading signals, profitability of consensus recommendation changes, and persistence in individual analyst stock-picking ability.” Source: Alexander Jungquvist, Christopher Malloy and Felicia Marston, “Rewriting History”, The Journal of Finance August 2009.”

I could go on certainly but there’s plenty of this kind of stuff going on to make you never want to invest again.

Let’s move on looking at markets for today and the week.

Markets fell logically early and then rallied when bears couldn’t do any further damage. HAL kicked-in and took us back higher as if the bad news from MSFT, AXP and AMZN never happened. Volume was summertime/Friday light and breadth was positive enhancing overbought conditions.







A reader writes that perhaps I’m misinterpreting the Summation Index below. He asserts a more correct reading is that with markets making fresh highs the Summation Index is in nonconfirmation mode since it hasn’t risen to new highs as well. That could be more correct. Anybody else have a thought??















A different view is with DeMark Sequential Setup annotations that completed their count yesterday on daily charts. When trends are very strong, markets can blow right through these readings and that may have happened today. You’ll note on the chart below the RSI (Black Line) is also at overbought levels. The last correct reading on this was May 6^th and markets reversed and got sloppy indicating a pause in the trend. Sometimes when these 9s get a sharp one day reversal such as we got at the opening they indicate a buying opportunity for dip buyers. We’ll have to wait and see how this plays out.





























































































































You have to grit your teeth and move forward sometimes given the nonsense, unethical behavior at the highest level and the lying taking place every day. It’s hard to deal with as a human being and remain disciplined. Succeeding in doing this is where the rubber meets the road.

That wraps up a fun week. We didn’t have as much fun as others given light positions but the month’s not over and either is the year.

Enjoy your weekend.