'Days of Infamy'

'Days of Infamy' - should be in the forefront of our thoughts as we honor what for every American is the knowledge of what deceit and surprise attack can do to our Nation, and how it can fortify our spirits to rise-up and challenge any and all vermin that murder our citizens, military or civilian. 

Yes, this matters beyond the chaotic market behavior (which relates in several ways, including flight-capital flows to 'perceived' safer harbor such as the US). It's appropriate this 'Pearl Harbor Day' to indirectly also honor the 9-11, the other 'Day of Infamy' in our hearts as well; as we not overlook the barbarian 'radical Islamic terror' attacks (any group that masquerades as religion preaching hate or enslavement is really a 'cult'). Whether Pearl Harbor or Paris; whether New York or London; whether Madrid or Nairobi or Kenya or Mumbai; for the victims and the shocked citizenry, these were all 'days of Infamy'. 

In most of these events, including the most recent in San Bernardino; without a resounding leadership, or until the leaders step forth to motivate citizens calling for both stamina, faith in our values; and commitment to vanquish our victims; it is too easy for those not recalling history to cower or (as we saw from too many in the UK's vote on taking action against ISIS) become resigned to dealing with the problem of Islamic imposition of their 'imported' faith upon the majority 'as if' there's nothing they can do about it (pathetic; as there is so much to be done). 

It's sad that it's taken so long to grasp what must be done; sad some leaders at this point still don't move not merely to attack the enemy; but intellectually give an explanation to our citizens of how a particular sect perverted the basic faith (most Islam is controversial, but Wahhabi Sunni/Saudi versions went too far for years as Western Civilization has known); so when do we 'shut down' many of the propaganda avenues that these groups use to subject the vulnerable in the faith, or convert those with no identify to their life (often in prisons, which you'll recall is how 'black Muslims' were recruited for years; Christian converts)?

This Saturday morning I listened to a recently-retired lead FBI counter-terrorism 'trainer' saying that 'most' mosques in the US and Europe are quietly supportive of extremist philosophy and discussed ties between groups and many mosques with the radical Muslim Brotherhood or even Hamas in the Middle East, that he said most police or even other FBI agents he trained were not aware of. Adding that the enlightenment-training programs were cancelled by our new Attorney General. I wonder if this is actually the case; and do understand Washington's desire to deflect Islamophobia; but calling out the real organizational structure of the enemy as they operate 'in' the United States is not a phobia, but failure to protect the citizenry by properly educating law enforcement 'who' sympathizers are rather than sugar-coat it. 

Departing from honoring the victims of 'days of infamy' and encouraging all to focus on the slow prolonged march to victory; with leadership provided that at times seems reactive not proactive (taking down regional internet is proactive), and with confidence in the nobility of embracing this challenge, there's one big difference. That's extended levels of the stock market; which was constructed in the wake of the post-9-11 plunge, by virtue of financial engineering. At that time we were bullish because financial assets and real estate soared, so even as it was funny money; people were still making money. In 2007 it became very evident that prices were out-of-sight relative to household income growth; and as we outlined that year; the derivatives bubble risking an 'Epic Debacle'. 

Now, years later, we have credit and equity market bubbles, Fed-led financial engineering on steroids that even the central bankers (well some) realize has gone berserk, so now the Fed is trying to emerge from the excessive stimulus corner they painted us into, with minimal disruption to markets they can effect. That's got them in a challenging spot as hiking rates in December is rare first of all; and the market has tried to behave 'as if' everything has been priced-in. 

In a sense that's so because the Jobs increase was almost entirely service or temporary related; with the net for the year being no manufacturing jobs. That actually helps sustain the idea that the rate hike doesn't mean too much; since those industries aren't as sensitive. However you know it's awkward for the Fed just by virtue of how they've reluctantly explained or rationalized policy shifts. 

Daily action - was handily impacted some by the Jobs number views, or more by the roiling alternating moves triggered by Oil and currency markets. These result in alternating moves under the S&P 2100 area, which remains a pivot of sorts; but more importantly technically, was a defense of the primary daily rising bottoms trend pattern.

All the gains from the excellent Wednesday morning Dec. S&P 2100 short-sale were harvested (in segments as a trader may have determined each day), and we are flat over the weekend.

On Saturday we learned that there are indeed additional Turkish troops working inside Iraq, perhaps in regimental size, on-top of a battalion previously agreed to by Baghad's (Shia) regime. The Iraqi Government has threatened to attack them, which seems ludicrous if the effort is to liberate (or put more pressure on ISIS access to) Mosul; whereas we wouldn't presume Turkey wants to occupy Mosul itself. Perhaps what we're seeing here is further evidence not so much of Erdogan's Islamist leanings (prevalent from his Eastern Turkey political base), but more a concern by Iraq that their second largest city might be liberated, but not  by Shia miliatia (the majority of the so-called Iraqi Army these days) which might suppress Sunni residents in other ways); if Iraq is really desiring merely to consolidate an Iranian/Shia crescent (with Russian help) from the Caspian to the Mediterranean. 

This gets more stressed; with greater risks of accidents too, now that Britain is in the fight; Russia is augmenting it's forces; the French carrier is there; and a US Carrier (Truman) 'finally' is arriving in the Eastern Mediterranean this week (which gives us more flexibility in-case Erdogan gets difficult with Insirlik, as we haven't had a carrier in the Persian Gulf for two months, or longer than that as Washington's 'pivot to Asia' pulled resources from the Mediterranean earlier).  

We're flat of course this weekend, and if nothing horrendous occurs Sunday we should see a renewed effort to rally on Monday; then a likely fade and a rebound towards midweek; but again that's barring exogenous events. Rallies are very risky and so are declines on an hour-to-hour basis. Notice that on Friday a huge run-up by the Senior Indexes was accompanied by mediocre breadth. Again most of the gains were in a narrow-universe of stocks; with the 'most-shorted' carrying most of the lifting duties. Huge Dow rallies with poor breadth justify skepticism.