Gold breaks out of narrowing trading range.

Stocks and commodities occasionally provide a wedge-shaped graph of prices vs time. The price of an exchange-traded gold fund (GLD) and a gold mining stock (THM) are illustrated in the graphs. Note that the wedge formed by lower highs and higher lows. The MACD first fell then began to increase toward the breakout and broke above the neutral value.

Here is another version of the graphic, the actual gold price. Notice the huge jump in two days:

Note also that the breakouts took place on high volume. That is significant; the breakout is not a fluke of trading on low volume.

What happens now? Gold will challenge the $1000/oz price (or the $100 share of GLD). Will gold break the $1000 price? I think it is more likely than not. Why? The FED continues to print money, the economy is sub-par and there is NO hint that Washington will do the right things to grow the economy.

DISCLOSURE: I am long on THM and a couple of other gold mining stocks. THM has a property in Alaska (near Fairbanks) that has 10M ounces of gold that has been found or is inferred on the basis of incomplete drilling data. It is the biggest gold find in modern Alaska.

Obamabots not serious about energy.

The Monthly Energy Review chronicles energy production and consumption data through May 2009.

From January to May, production from coal fell from 1.968 quadrillion Btu (QBTU) to 1.722 QBTU — a 13% decline.

The use of natural gas fell 0.6%, from 1.845 QBTU to 1.834 QBTU.

And nuclear went from .771 QBTU .684 QBTU, falling 11.2%.

Can you guess what happened to renewables?
They grew from .650 QBTU to .707 QBTU — a rise of 8.7% — and clearly the only grower of the bunch.

Renewables are the most expensive energy. But, is the Obama regime really committed to produce clean energy - i. e. nuclear and geothermal? The answer is NO. The DOE turned down a request by Usec to guarantee a $2B loan so America would have its own facility to produce nuclear fuel. And the DEO turned down a request from Raser to guarantee a $200M loan to build a geothermal plant. What the Obama regime wants is high cost wind mills and solar farms.

Obama a "post turtle?"

While suturing a cut on the hand of a 75 year old rancher, who's hand was caught in the gate while working cattle, the doctor struck up a conversation with the old man. Eventually the topic got around to Obama and his bid to be our president.The old rancher said, 'Well, ya know, Obama is a 'Post Turtle''

..Not being familiar with the term, the doctor asked him, what a 'postturtle' was. The old rancher said, 'When you're driving down a country road and you come across a fence post with a turtle balanced on top, that's a 'postturtle'.

The old rancher saw the puzzled look on the doctor's face so he continued to explain. 'You know he didn't get up there by himself, he doesn't belong up there, he doesn't know what to do while he's up there, and you just wonder what kind of dumb ass put him up there to begin with'.

Smart Power?

During her run in the primaries, Hillary talked about "Smart Power," of setting priorities in foreign affairs; a realistic approach to achieving limited goals. Of course, she was in the mainstream of the Democrat Party that saw an advantage in losing the Iraq war so as to make George Bush unpopular and through that regain control of Congress. That is the genesis of the present disastrous foreign policy of the Obama regime.

Obama argued that he was not really for defeat, but that the real war against Islamic extremists was in Afghanistan and Pakistan, not in Iraq. So, Obama is tied to the tar baby of fighting a war in Afghanistan, a task far more difficult than the war in Iraq. Difficult as the task of fighting the Jihadist Taliban is, it is made even more so by the customary idiocy of Democrats and what amounts to their use of power: something that might be called "Stupid Power." Democrats project internationally an image of indecisiveness, of being naive, of being pushovers. Our would be enemies think of a Democrat President as a paper tiger. That is why enemies feel that they can take liberties that eventually lead to war. Jimmy Carter was perceived as a wuss, so the Khomeni regime of Iran felt safe to attack the American Embassy and take our personnel hostage. Khomeni felt justified when Jimmy Carter's half-baked idea to rescue the hostages ended up as an embarrassing disaster. Contrast this to the response of Ronald Reagan to the terrorism sponsored by Libia. Khadafi got the message that messing with America was not safe.

Fast forward now to Bill Clinton, another Democrat. Our enemies (Al Qaeda this time) felt safe to attack out embassies in Africa and a warship in port. Bill Clinton did as the Jihadists expected: he agonized about the legalities of capturing Bin Laden then he botched the operation in Mogadishu. By worrying about cooperation between the CIA and the FBI, Clinton set the stage for 9/11.

Fast forward now to the usurper of the Presidency: Obama. Obama has committed himself to fighting the war in Afghanistan, but he ruled out the idea of winning the war. The alternative to victory is defeat. Americans know this and it is just a matter of time before the support for the war in Afghanistan disappears. That is "stupid power."

In the meantime, Hillary lost her power base and became part of the Obama regime. Not only that, but she is on record of being the author of stupid power.

Honesty compels me to point to a use of "stupid power" during the Bush Administration as well. No, not the Iraq war, but the US support of Georgian idiocies. The Russians had ample justification to fear a massacre of the Russian minority in Georgia, so they supported separatists in Ossetia with Russian troops as 'peacekeepers.' Not an ideal situation. The proper policy would have been to reassure Russia on the future of Russians in Ossetia. After all, Russia did not feel it necessary to re-invade Latvia, Lithuania of Kazahstan to support Russian minorities. Instead, there was talk of admitting Georgia to NATO and giving them Western arms. How Georgia felt it safe to attack Russian troops in Ossetia is the worst failure of American foreign policy. Rumors that Russia's Army was dead were premature. Georgians paid a heavy price and may never get back Ossetia. As if this was not bad enough, the Bush Admin decided to put ABMs in Poland and the Czech Republic, ostensibly to counter Iranian missiles of the future. Sheesh, this reminds me of the story of King David leaving behind a trusted advisor to give Absolom bad advice.

The Obama regime is taking stupid power to a new level of stupidity. By telling the Islamic world that Bush was wrong just encourages the Jihadists to continue their effort toward a world Caliphate. And to make matters worse, the Obamabots are dismantling our anti-terrorist efforts and aim to prosecute those who kept us safe during the Bush presidency. In the face of this CHANGE Democrats have only HOPE that their weakness and use of stupid power will prevent an even greater disaster than 9/11.

Wither the Stock Market?

The Stock Market took a hit recently with the S&P 500 dropping below 1000 yesterday, the first of September. Here is the graphic:

So, here come the Pundits starting the talk again about whether the Stock Market now will crash or just retrace its rally. OK, let's have a reality check.

The Stock Market turned around in March and has been rallying ever since. Since, the Sep 15 2008 infamy, when the FED froze the money in the banks and Obama's socialist agenda threatened to drive us into Depression II, the world was in a financial panic. Then in March, the tune changed. A Depression seemed no longer in the cards. The Market reflected the change in expectation, we were in a Recession only. There is a hesitation now as perception is about to change again. I sense the investing public sees a shallow recovery (a jobless recovery), where corporations will do OK because they shed millions of jobs, the economy is reduced and Obama's most destructive initiatives (Cap and Tax and ObamaCare) are at least partially stimied. So, we can expect the rally to continue to maybe S&P 1300 (or the DOW around 12000). Any further moves up would require a Republican House and a Republican President. Cycle predictions call for a crash next year.

I have included the graphic of the S&P 500 to point out several features. While, the short-term MACD (the black line in the lower graph) has dipped below the red line (which is the longer term MACD or momentum), the moving averages do not signal a major change in the Stock Market. The 50 day moving average and the 200 day moving average are still moving apart, so the momentum is still positive though maybe a few rough days lie ahead. Could this change? Of course. If ObamaCare is approved or Cap and Tax becomes law, expect the worst. Otherwise, it's a rerun of Jimmy Carter: stagnation and eventually (when deflation stops), inflation and increasing gold prices.

ObamaCare: zigging and zagging.

In today's POLITICO, Mike Allen and Jim Vandehei describe the machinations of Obama to remake his message on health care:

http://www.politico.com/news/stories/0909/26672.html

Obama first zigged (said there would be no more public option, even sent Sec Sebelius to say it), then zagged 2 days later (when the NutRoots rebelled) and said that he never said what he said. Now Obama zigs again and tells us that the public option is no longer part of his plan. House members are quoted to have said that their members will demand the inclusion of a public insurance option. Obama has no plans to insist on it himself, the officials said. Nor has he plans to oppose them.

Shades of the Clinton triangulation. At every turn, Obama is shown to be a liar and a clumsy liar at that.

The Media should be indicted.

In an editorial, the W. Times has described outright Media fraud about reporting in the Media.

http://www.washingtontimes.com/news/2009/aug/31/false-reports-about-guns/?feat=article_top10_read

Case #1. The man in New Hampshire.

On CBS evening news, Katie Couric said: "Are we really still debating health care when a man [Mr Kostric] brings a handgun to a church where the president is speaking?" Ms. Couric linked Mr. Kostric's gun to "fear and frankly ignorance drown[ing] out the serious debate that needs to take place about an issue that affects the lives of millions of people."

The facts: Mr Kostric has a legal permit to carry a concealed weapon and he always carries one. Mr Obama WAS NOT SCHEDULED to appear at the protest held at a church. It was SEIU thugs that attacked Mr Kostric and a friend, kicking, pushing them ans spitting on them. In spite of these provocations, Mr Kostric did not draw his gun and did not threaten his attackers. Ms Couric should be indicted for fraud, journalistic malpractice and barred from broadcast journalism.

Case #2. The gun toting man in Arizona.

On Donny Deutsch's Aug. 18 show about the Arizona town-hall meeting, the producers aired a clip of an anonymous black man carrying the so-called assault rifle [a semi-automatic, which is NOT an assault rifle]-- but the network edited the tape so the man's race was obscured. MSNBC anchor Contessa Brewer said, "There are questions whether this has a racial overtone. I mean, here you have a man of color in the presidency and white people showing up with guns strapped to their waists." Another commentator on the same show worried about the "anger about a black person being president." The supposed result: "You know we see these hate groups rising up."

The facts: Ernest Hancock, the radio host who staged the event, was hoping to get some free publicity for himself and his show. There were no angry white men toting a gun to Obama speeches.

Again, we have a case of journalistic fraud and malpractice. The participants should be tried for fraud and jailed. And MSNBC should be put off the air. I confess that I was taken in by the reporting myself.