TUESDAY 1/21/14

Concern over an Aussie property bubble grows as home prices surged strongly higher in 2013. Dollar/yen continues higher to 104.63 so the weaker yen pumps the NIKK up +1.0% and the S&P futures +4. SSEC is up +0.9% as the PBOC saves the day with liquidity again. The central bankers are the markets. China liquor sales surprisingly slump ahead of the new year celebrations. Lenovo is in talks to take over IBM’s low-end servers. IBM wants to focus more on the software side. Lenovo has been very successful after buying IBM’s PC business a few years ago.

[Text is Redacted: Purchase January 2014-01 to Read the Complete Chronology]

Thailand declares a State of Emergency in Bangkok, Thailand, as the violence continues. Authorities will now use a heavier hand to stamp out the protests. Governments, such as the Ukraine and Thailand, are pursuing these heavy-handed approaches to protestors that will only guarantee long-term political instability. A huge security breach occurs in South Korea that may affect as much as 40% of the entire population. Credit card information and other details such as phone numbers and addresses are stolen and distributed to marketing firms. The Internet appears to be a leaking sieve in respect to security with hackers holding free reign. South Korean President Park Geun-hye is impacted by the security breach as well as UN Chief Ban Ki-moon. An Oxfam report says 85 people own the equivalent wealth of the 3.5 billion poor people which is one-half of the world’s population. Pope Francis asks the financial and political leaders gathering in Davos, Switzerland, for the World Economic Forum, to use their wealth and influence to help the poor and disadvantaged.

Jim McCoggin, Principal Global Investors, remains bullish and says “the S&P 500 is not in bubble territory and is not over extended,” and “buy on setbacks.” Trader Stephanie Link says the “health of the market is good” and to “buy the pull backs in the blue chip companies.” A CNBC business television survey shows nearly 90% of financial planners are bullish on stocks. MS Strategist Adam Parker says “we continue to be bullish on the market.” Floor trader Ben Lichtenstein, Tradersaudio.com, remains bullish and says the upside “can continue a lot longer.” The rampant bullishness continues in the markets. There are no bears remaining. Virtually every well-known analyst, trader or pundit is bullish looking for SPX 2000 in 2014. The markets are likely ready to make an epic move to the downside.