Free Reports

Weekly and or Pre-Opening - Main report excerpted. on or before 11:00 am

Archived report titles and dates available upon your request to see how we commented in advance of the market action:

03.04.10 - PRE - THE LIGHTER SIDE – HOW CONVENIENT!

03.05.10 - PRE - HALLELUJAH

03.03.10 - PRE - AUSTERITY – BACKLASH AND CURRENCY TRANSLATION (WHAT WAS, ISN’T)

03.02.10 - PRE - MORE HARD PROOF OF WRONGNESS, MISLEADING CONCEPTS (SHORT VERSION)

02.25.10 - PRE - SCREW JOB - RIG-ged Advice

02.24.10 - PRE - ASSIGNIN BLAME

02.23.10 - PRE - CONNING THE CONS – DAMNABLE LIES AND CONTRADICTORY OPINIONS

02.22.10 - PRE - STRAW POLL – DILEMMA: RON PAUL V. STOCK MARKET

02.19.10 - PRE - REFLECTING WHOSE VALUES? - FICKLENESS OF CONFIDENCE

02.17.10 - PRE - ASPIRATIONS - WHY THE RALLY? – PORTFOLIO

02.16.10 - PRE - HALLMARK - QUESTION MARK

02.11.10 - PRE - BREATHLESS – LIARS ALL – ONE FOR ALL AND ALL FOR NONE

02.10.10 - PRE - INSIDIOUS WHIPSAWING – next obsession talking point

02.09.10 - PRE - VIRTUAL STATE OF APOPLEXY

02.08.10 - PRE - UH DAH - NO ABSOLUTES

02.05.10 - PRE - FEAR versus RISK

02.02.10 - PRE - RARE TREND MODIFICATIONS - PRELUDES TO NEXT DIRECTION - TURN INTO OBSESSIONS

01.29.10 - PRE - THE WEEK THAT WAS GROTESQUE EXUBERANCE - SAGA CONTINUES

01.28.10 - PRE - BETRAYAL - OBSCENE

01.27.10 - PRE - THE ANNUAL FREAK SHOW

01.26.10 - PRE - THE APOLOGIST'S HANDBOOK - parts 1 & 2

01.25.10 - PRE - ONLY REAL BULL REMAINS CLASS ACTIONS SUITS - CLEVER VS. CLUELESS

01.22.10 - PRE - READY, SET, RESET: DO-OVER FOR MARKETS AND DEMOCRACY

01.21.10 - PRE - WITH A LITTLE HELP FROM OUR FRIENDS – DOING GOD’S WORK – Goodwill…Good luck- God-awful

01.19.10 - PRE - TOO BIG TO – FEEL - NO CONTRITION- JUMPING TO CONCLUSIONS

01.15.10 - PRE - BYGONE DAYS REVISITED - HOW BANKERS REALLY THINK: “IT’S OUR PRIVILEGE TO SCREW YOU”

01.13.10 - PRE - EYEWITNESS TO DISASTER ... No good crisis goes “unwasted”

01.12.10 - PRE - TELL ALL - WEIGHING IN

01.11.10 - PRELUDE TO THE WEEKLY REPORT

01.08.10 - PRE - NO PROFILES IN COURAGE THE GREEDY-BASTARD BANKERS LIVING A DREAM

01.07.10 - PRE - JUXTAPOSING – REVISIONIST - LOOKING THROUGH A PEEPHOLE

01.06.10 - PRE - FOOLS RUSH IN WHERE WISE MEN FEAR TO TREAD

01.05.10 - PRE - ACTIONS HAVE CONSEQUENCES

12.31.09 - PRE - SECRETS REVEALED, CREDIT GIVEN A BRIEF PICTORIAL REVIEW

12.30.09 - PRE - WHY BOTHER? (And Santa Rally – Jan Effect)

12.29.09 - PRE - PUTTING THINGS IN PERSPECTIVE THE (PABLO PICASSO) WAY

12.24.09 - PRE - HAPPY NEW [NO] YEAR - CHECK THE DECADE’S RESULTS

12.23.09 - PRE - THE HYPOCRISY OF NON-THINKERS…HARVARD INCLUSIVE

12.22.09 - PRE - SIMPLIFYING THINGS – RANGEBOUND - FLATHEADS

12.18.09 - PRE - PLEASE MIND YOUR OWN BUSINESS SHUT YOUR MOUTHS

12.17.09 - PRE - VEXING PROBLEMS - Cutting to the chase. Reversion to the mean – the Bottom line

12.16.09 - PRE - SIGNATURES STRAIGHT UP – HOW LIBERAL

12.15.09 - PRE - BIRDS OF PREY – ANTICLIMACTIC

12.11.09 - PRE - MAJOR DENIAL NOR SOCIALLY ACCEPTABLE

12.10.09 - PRE - CIRCULAR LOGIC

12.09.09 - PRE - NEVER TOO LATE FOR FACT CHECK ... unless you’re a shareholder or taxpayer

12.08.09 - PRE - LET’S GET THE FACTS RIGHT [Part #2] – Putting more fuel on the fire to save banks

12.07.09 - PRE - LETS GET THE FACTS RIGHT [part 1] – putting more fuel on the fire to save banks

12.03.09 - PRE - MISDIRECTION – CAPITAL MURDER - ETF

12.02.09 - PRE - DISINGENUOUS COMPLACENCY

12.01.09 - PRE - ABERRATION AND PIPE DREAMS

Only Special Alert Reports (titles) remain listed but any report can be requested to be compared against the market session of that day.

09.07.09 - SPECIAL NOTICE: While it’s been about five months from our last ‘special notice

06.02.09 - SPECIAL MUTUAL FUND ALERT

04.30.09 - SPECIAL NOTICE - MARKETS REACHED OUR FIRST GOAL TO SELL 27% GAINS

03.26.09 - ALERT: POTENTIAL MELT UP, AKA BUYING STAMPEDE - "climactic" as opposed to "parabolic."

03.01.09 - SUNDAY NIGHT SPECIAL UPDATE - SEMANTICS (A PRECURSOR TO WORDS MATTER)

01.18.09 - SPECIAL ALERT - OCO - ONE CANCELS OTHER - Good v. Evil

12.14.08 - SPECIAL ALERT - TRUTH IS NOT OUT THERE

12.12.08 - SPECIAL UPDATE - IT WAS ALL A BAD DREAM - WELCOME BACK TO YOUR NIGHTMARE

10.12.08 - SPECIAL ALERT - WINTER OF DISCONTENT (#1) - ANY RALLY WILL BE AT ODDS OF THE TRUTH

10.08.08 - SPECIAL REPORT - SAFETY OF DAMS - ITS GOING TO BE A LONG SESSION ...Cramer wanted Dead Poster

09.18.08 - SPECIAL NOTICE - MISLEADING, HARBINGER ...whistling past the graveyard

09.17.08 - SPECIAL NOTICE - CAUTION - calling for market melt-up

09.17.08 - SPECIAL REPORT - A PROFOUND MOMENT, we are more qualified calling a bottom when none of them ever saw the top, CANARD

09.15.08 - ALL REPORTS DONE UNDER SPECIAL UPDATES Numbering #1 - 5 - TECTONIC -Absence of due diligence - Seeking fair value

09.07.08 - SPECIAL SUNDAY - NIGHT ALERT - YOU HAVE LESS THAN TWO WEEKS TO HEED THE STORM WARNING

08.14.08 - MARKET REPORT - STRONG ADMONITION ADVISORY

06.22.08 - SPECIAL NOTICE - PEACE OF MIND – TURNING POINT APPROACHING

04.14.08 - SPECIAL ALERT - DIVERSIFICATION V. TRADING

03.17.08 - SPECIAL REPORT - BIRD FLU PANDEMIC- NOT QUITE -SLIPPERY DIVIDENDS

02/25/08 - SPECIAL ALERT - FROM ALERT TO NOW PANIC – CRISIS DU JOUR AND BEYOND

01.21.08 - SPECIAL REPORT - THE END OF DOGMA: TIME FOR SOLUTIONS NOT THEORY CHATTER OR HAPPY TALK

12.27.07 - SPECIAL REPORT - GUIDING LIGHT - BREAKING NEWS & Addendum

11.28.07 - SPECIAL REPORT - YUP, THOSE "I THINKERS" ARE THUNK OUT ABOUT NOW

11.27.07 - SPECIAL MIDDAY - PROVING SOME OUR POINTS OF FACTS – WORMHOLES AND TURKEYS

10.22.07 - SPECIAL ALERT - DOES AS WE DO, NOT AS THEY SAY

10.04.07 - SPECIAL REPORT - DISTRIBUTION OF INTELLIGENCE, WE INTERRUPT REGULARLY SCHEDULED PROGRAM

These limited postings are some of the 40 reports produced weekly: Pre/Post, Midday, and Pre Close. Our desire is to work with YOUR holdings to return you back to financial health. To request 'pristine' copy of any report of any day ...please call 201 - 488 - 2314

Intraday excerpted update posting - 9:45 -12:00 - 3:00 PM

LIVE DAILY REPORTS:

2009 Long Portfolio Value

Gain/Loss Since Purchase Gain/Loss Today DOW YTD

... end of day close

61,445.495,611.49 +10.05%

29.09 0.05% -82.35 -1.04% -10.47%

Since February '09 we’ve been posting our running performance totals based on Friday’s close. Among reports 12.19.08 -PRETENCE OF KNOWLEDGE -THE PARADOX OF THIEF through our last sale 08.26.09 - ON ICONS AND IRONY . Our results speak for us proudly . While 'mavens' are always backwards looking, they can only suggest how great the rally’s been off March lows but that doesn't’ translate into results for them we set forth the proof:

2009 Model Portfolio end of week ValueGain/Loss since purchase YTD Gain/Loss Dow YTD

2/27/09 69,685.00 -1,346.00 1.89% -19.52%

* theoretical sale of 1/3 4/10/09 122,048.01 26,277.01 27.44% -07.90%

* theoretical sale of 1/3 6/06/09 159,444.00 58,373.00 57.56% -0.15%

* theoretical final sale 8/14/09 186,367.7482,596.74 79.33% 6.21%

These results produced via 100 shares @ stock selection from proper buy/hold strategy copy of list is available

2009 - Long Portfolio Value end of year: Gain/Loss [Since Purchase]: 203,660.98 +99,889.98 +95.94%

DOW JONES INDU 9820.20 +11.89%

NYSE COMPOSITE 7016.92 +21.88%

NASDAQ 100 1725.24 +42.39%

RUSSELL 2000 617.88 +23.71%

S&P 500 INDEX 1068.30 +18.27%

VALUE LINE INDEX 2186.30 +55.63%

AMEX COMPOSITE 1801.19 +28.88%

WE DON’T NEED TO TEAR EXPERTS DOWN TO BUILD OURSELVES UP, they do a damn good job on their own. Their pathetic track record speaks for itself, as does our axiom …with friends like these folks who needs enemies. CXO Advisory” '07 says performance of some “gurus” is “reasonably good” about 60% but on average, self-professed "gurus” are only right 48.6% of the time that means even (worse than coin flipping!) http://www.cxoadvisory.com/gurus/#snapshot

(201) 488-2314 avail 24/6 INFO@INVESTORSALVATION.COM

Investor Salvation

A subsidiary of MBL & Associates DBA Hedgehog Consulting

Call 201-488-2314

Info@investorsalvation.com

hedgehogllc@aol.com

WATCH CAREFULLY, THINK LOGICALLY AND RESPOND ACCORDINGLY

Our writing tone is much like Abelson of Barron's. We may be irreverent, but our content is never irrelevant

DOGMA HAS ENDED: It stands to reason if the firms can't do for themselves -they definitely can't do for clients. The best approach to self-professed TV messiahs is to close your ears, open your eyes, turn off the idiot tube and know free advice is very costly. Our reputation is an open record, refuting media's contention "no one can time the markets.”

Daily we post live updates revealing our forecast, timing, and trading abilities in advance of markets. From proper due diligence each is time/date stamped ahead of markets - verified against time/sales. Alleged experts who never saw tops, nor knew when to take profits will never see correct bottoms to use proceeds to purchase at lows. They never post their track record and can only commiserate about a prior day's action as we are locking in profits, setting up for the next move. Their advise to buy dips (dollar cost averaging) is a flawed strategy, as cheap always gets cheaper. To view the most hyped stocks the (bluest of blue chips now penny stocks) that lead to Creative Destruction, (See) MYTHS Page

* IF JIM IS TELLING THE TRUTH... thanks to Don Harold confirming .. friends like Cramer who needs enemies ... http://www.youtube.com/watch?v=vtrke0NfbcQ

There is no wonder why investors trust and confidence is crushed along with $30 trillion in global wealth.Our production of 40 reports per week is a service to professional traders meant to pique your interest illustrating what can happen from proper advance planning. Without a defined strategy, one cannot decide the correct investment vehicle nor know where add-ons should be done to cost average properly, lower breakeven, and when best to take profits.

A partially informed investor is about as effective as a partially informed surgeon; they will hurt themselves and those around them. We wrote 12/2007 WR- Beware of the Ides of October …that all capital markets were on the brink of collapse since then the bloodbath obliterated $32 trillion in global wealth and the elimination 70K brokers, yet CNBC serves no utility was bullish all the way down and *Analysts' Accuracy in forecasting is the worse in 17 Years. (Bloomberg)

Proof our technically forward-seeing prowess comes from inter-market relationships. We engineer what is best for clients in opposition to headlines, thus taking the guesswork out of investing. We are among the very few who avail themselves in 'live time' for clients to speak with us directly. Our interest is not selling subscriptions but to assist in reinstalling confidence by reviewing your investments. Segregated profits,uses the market's money NOT new funds. This is needed to grow accounts, not fuel the market. We know what will happen; not regurgitating what has happened See- WEEKLY CHART Page

At your request, we'd be pleased to forward any report in entirety, validating that being proactive is necessary to preserve capital. Moreover, not every dip is a buying opportunity. As usual, technical's lead and eventually in the fullness of time, fundamentals react albeit too late the THEORY OF DIMINISHING RETURNS (See) CONTACT Page

#2 - Subject: Midday - Anniversary 
Date: 3/9/2010 12:11:57 P.M.

In our opinion, markets are struggling to make these nominal new highs on the day. While it certainly would appear to be in poor taste should a selling correction commence on the anniversary date of last year's historic bottoming out and turning up, it is no more significant than every other key anniversary date that the experts were sure the markets would break…

…whether it be Black Monday, the anniversary of the 1987 Crash, or for that matter February 14, the St. Valentine's Day massacre anniversary.

Of course, this time last year all the experts were assuring clients and viewers that the economy already had "fallen off a cliff" and that there was no reasonable expectation that the market wouldn't fall even further. There were few who understood the importance of the government's stimulus injection and even when we rallied into April, they were all insisting that the bottom would have to be retested or that markets were in a bottoming process so that there was no need to buy at that time.

We can still hear them claiming that cash was king and they had already abandoned their long term buying philosophy.

By June, they were sure there was an imminent crash due to some Head & Shoulders formation where we specifically stated that it would resolve itself in a massive bear trap. Finally, by August and September, they were all convinced that a new bull market was born. Effectively, the S&P had moved from 700 to 1100 and those who first took their longside recommendation garnered 46 points after surrendering or shorting 500.

Equally, the financials had already begun to roll over and trend lower and effectively each made its new low last month with a correction back to 1140, thus erasing any nominal net gains they had from September.

Now of course they're back on the other side of the camp, bullish as they can be, having churned themselves by 100 S&P points: Long in January from 1140 with the mad dash selling at 1040 and bullish right now at 1140.

We of course have the results that they only WISH they had (if they were talking in hypotheticals)!

Our posture remains the same. We're bearish when they're bullish. We're bullish when they're bearish. And our strategy remains to be selling these rallies where the last position was put on at 1135 and we see no reason to add to the position - except at approximately 10 point increments where our next position would be out on at 1152.

Let's keep in mind that the battle over the last 65 days is not making new highs; it's merely attempting to get even with the January levels. But that would not be a victory. It would only be to make others even on the year. So it's worth our while to take the defensive posture since we don't believe they'll have that opportunity.

They certainly have missed the opportunities we have taken where our Long Model Portfolio is 10% ahead of the indexes YTD and most of those profits are already booked and in the bank.

Orders on GS and others satisfied our prices today and once again, it comes down to market timing. Not the same tortured excuses and advice from so-called experts who have no sense of market timing.

NOTE: Due to another one of those intrusive doctor's appointments, we will be out of the office as of 1:00 PM - not likely to return before the close. Phones will be switched over. 
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Excerpted Market portion only from 03.09.10 - Pre Opening - Let's be honest if not realistic - Extrapolate this

This perfectly lends itself to the experts who can't see tops or bottoms, can always manufacture some explanation after the fact, will tell you two weeks from now what you should have done today, and will only in the fullness of time be able to predict the past and may embrace our expression to "Sell in March, go away, and only come back in May."

INDEXES #1: Again on the near term basis, we indicated that some cycles were due to crest starting Friday and that at best they might extend themselves out to yesterday.

We continue to point out that the 1140 area in S&P represents significant resistance, as did INDU 10523.

The talking heads who were looking for 1250 or 1500 S&P last year have tweaked their "certainty" and are now calling for 1165.

Conversely, those who were certain the US$ would crash are now conceding that the Euro is over shorted/overcrowded with every hedge fund being exposed to that trade and expecting a mild counter rally to 1.37. Of course, they were all long at 1.52 and last night's close at 1.36 still provides a short squeeze that could take it as high as 1.43 OB.

Unfortunately, the gold bugs that keep looking for $1300 are equally certain that the pass down at $1040 was another "buying opportunity of a lifetime." And that guarantee will soon fade away when the $1100 threshold is broken again.

In conclusion, we'll stay with our independent research and trade suggestions since, as we posted yesterday, in a basic sideways market our returns thus far in the Long Model Portfolio alone are 12.3% YTD which has us approximately 10.5% better than the INDU and the S&P, the guidelines from which the hedge funds attempt to measure their results.

But with last year's 103% Long Model Portfolio return, the hedge funds only managed to turn in 20% and considered it a substantial victory, even though they were 40 percentage points behind the major averages. No performance fees were paid to them last year. Were they worried about capital gains? The year before, they were down 35%…So why waste time discussing theory?

And those dangling the carrot out here, suggesting the first half of this year should be sideways and we'll see a strong rally from 12000 - 12500 in 2010, also choose to ignore that this year is midterm elections and that will be the insurmountable Wall of Worry that will likely freeze all traders dead in their tracks. But we're getting ahead of ourselves…since they won't recognize that fact until late October.

INDEXES #2: The overnight range was 1137.20 - 1131.70. Asia started to take back some of its Monday gains. And while we still have a chart possibility up to 1145, we suspect any opening under 1136 will keep pressure on the markets and repeat yesterday's acknowledgment that the 1120 - 1123 support still needs to be tested.

Should we happen to close today or any day this week under 1117.85, another intermediate top would be set and that would conform to our lower high and slow retreat in the markets, particularly while everyone else is looking in the opposite direction.

They can obsess over the swings in crude oil as some false market leader but here too, subsequent lower highs keep arriving with the Dec 4th print being the high watermark at $85 and Friday's print at $82.50 also comports to our lower high scenario.

NOTICE: For 36 months we have been presenting most of our reports with regularity, [all] were time/date stamped ahead of market action and well in front of lagging news headlines and experts excuses after the fact. This was as a public service, in open forum as proof in contradiction to the myth that markets cannot be timed. All our publications can be checked against time and sells data.

During these troubled we want to continue to publish (some) updates but dedication to subscribers and private clients, demands our attention whereas reports may be delayed to insure clients have assimilated the information before facsimile is published.

As always, we welcome inquires and will answer anyone’s questions in live time since no other research firm has a fuller appreciation to welfare and how hard trusting investors have toiled to share in the American dream via the capital markets. Special alerts triggered by external events, and we would post notices out of concern to all investors. 
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03.08.10 – WEEKLY REPORT - MOMENTOUS OCCASION

We are pleased to announce the birth of our first grandson, (photo insert) Nicholas, which takes the Levy dynasty forwards another generation. Interesting to discover that we do have history behind us with a family tree constructed by relatives in Israel where our great-great-grandfather dates back to 1864 with Polish, Russian and Hungarian bloodline and the Levy lips trademark lives on.

If this were a media report, they’d want to know how this has anything to do with the market and what the impact will be. Always ready to answer the curious question, it simply means your author and the grandfather just aged a bit more. But both parents and grand parents are doing well!

We will answer the query also by reminding all we have a ‘cycle due to crest in this time slot’ (or) just about when everyone else has come back to a full bullish attitude. You may recall right before the February “correction” we produced articles saying there were not enough bears to be found.

That situation is made even worse now simply because those ‘overzealous bulls’ who came into the New Year with attitudes last year’s rally would not cease until the spring. So convinced then more now that the last dip, which produced new yearly lows, was the ‘buying opportunity’ others had been waiting for and they took advantage of that February entry.

It does appear once again that we stand-alone - as virtually every outlet and blog using whatever modeling means they subscribe to, are certain there are no more IMPEDIMENTS to derail this latest move. Coupled with seasonality’s it is onward and upward from here.

Some cite the fact that the Fed will now stay on hold for most of this year based on the FOMC’s last statement. Others who told al to buy ‘emerging nations’ are certain that now with issues in Greece and BRIC nations that there is no alternative investment venue than the US, while still others still point to some perceived economic improvement when only 36,000 jobs were lost in February. (Note the word “only.”)

Throughout the week, we will introduce ‘unique economic charts’, some of which are supplied through the Fed. Again, we stand on past comments that some “see the glass as half-full or half-empty” and most don’t see the glass at all.

Remember, heading into this economic malaise, the majority of experts and economists were convinced that the fundamentals were sound and that, at worst; it might be a slightly harder landing than the aforementioned “soft landing” that they prescribed.

For clarification purposes, today’s report will address both technical and fundamental summations and why we are already on the record as stating that markets remain in a technical downtrend based on Monthly charts and we will present them below. But more importantly, why the same experts who missed most if not all of last year’s rally are now taking the position that was applicable to last year and was our basis for buying when they were shorting.

The injection of government stimuli last March was the reason we were aggressive on our buys, knowing that both negative sentiment and a lack of investor participation by the public essentially made the government the investor of last resort.

Currently, just the opposite is occurring. The overriding concern is when the Fed will be extracting their money. To which, temporary programs such as Cash for Clunkers and even tax credits for first time home buyers are being expiring.

As a result, what was… isn’t. This continues to make our case that technicals lead and eventually fundamentals and other late excuses follow and why timing, particularly in today’s illiquid markets, becomes ever more important. You’ve just witnessed again the euphoria and enthusiasm at tops – be it in January or last Friday’s push to a lower but secondary high – versus the pessimism that arrived in February, particularly against a Q4 earnings period that was perceived to be strong.

Purely as an early hint an inside look to other economic charts presentations throughout the week. We introduce this earlier surreal and scariest Job Chart first.

Dare we say, recession is too light a term and as to a recovery underway, not when measured by labor and past events back to the 1974 or 27 months into this period and no bounce … it’s a DEPRESSION, something everyone else refuses to admit to:

#1- THE SCARIEST JOB CHART EVER - We can debate whether today's jobs number was good or not, but this much is clear, compared to other recessions, the job losses, and lack of job gains, are truly unprecedented. This before we show other charts including but not limited to productivity vs. labor costs falling to near all time lows.

Further into the week we will also be challenging other experts including the likes of Vanguards Bogel’s claim of buy and hold and not to try timing the markets. Holders did not count on clever market participants and just a tweak here or there showed down 20% to get you out, up 23% to get you back in and — voila! A massive out performance form-fitted to recent history:  B&H performance of $63,791 versus risk managed performance of $88,095.

#2 CHART BUSINESS SECTOR PRODUCTIVITY - Not Sustainable by MICHAEL PANZNER - March 4, 2010 repeating a familiar pattern, U.S. nonfarm productivity surged in the fourth quarter as unit labor costs fell, indicating that businesses are making the most of a weak jobs market and squeezing more profit out of each worker.

Not surprisingly, many economists viewed the report as a positive sign. If companies keep earning more money, the logic goes, and then the economy's return to growth will not be far behind. The most likely outcome? Isn't it also possible that if hiring remains soft, a critical mass of those who are still employed -- especially those with a union standing behind them -- will say "that's enough!" and demand more money and benefits from their employers?

If so, that could set the stage for a period when wages and prices rise despite weakness in the overall economy.

MARKETS: What the talking heads are not telling you so between Comstock Partners and us will.

Technically, if the market, as we believe, is discounting events that will not happen, the disappointment will be severe---and in a market increasingly dominated by trend players, the rush for the exits can be something to behold.  When the markets were so far down off by 20% it was the new president's fault and he alone owned the new bear market.

Somehow with no credit for the nearly 70% rally from the lows where ‘experts’ advised all to move to cash financial confidence was shattered. Since then came the major swindles, Madoff - LEH - and although no new safe guard regulations have yet been installed. His 'green shoot' and 'stimulus programs' lack the most needed component TRUST and a cessation of wrong media advice. This is why there has not been a real recovery to wealth and more so why investors are fleeing in mass - not even waiting to get back to even from two years ago forsaking all time highs on 2000.

Experts merely looking back should see the market peaked on January 19th at 1150 intraday on the S&P 500, declined to 1044 and now has bounced back to 1122. After the March 2009, low the index moved 62% in six and a half months, but only 4% in the last five and a half months.  In our view, this is all part of a topping formation that will be followed by a substantial decline in the period ahead. (See monthly charts below to illustrate downtrend remains in tack).

Fundamentals - Why the Rally Can't Be Sustained Comstock Partners

In our view, the strong rally off last year's March low is a contra-cyclical move within a secular bear market that started in March 2000.  We have been undergoing a major credit crisis, followed by severe decline in income, a collapse in asset prices and record debt.  A number of detailed studies have shown that economic recoveries following such events are of short duration and extremely weak at best.

Despite massive efforts at stimulation, we see no reason why the outcome this time will be any different, and the evidence so far supports this view.   The economy is going through a process of deleveraging debt that is creating strong headwinds against a self-sustaining recovery.

The major drivers of previous economic recoveries in the post-war period have been housing and consumer spending that was spurred by easy credit conditions.  Those drivers are just not working this time around.  Despite the herculean efforts of the Fed and the White House, credit remains tight.  Bank loans are down 27% from a year earlier while consumer credit is down 4%, the most since World War II.

Although the monetary base has soared over the last 15 months, M2 money supply is down 0.3% and MZM money supply is down 4.2% annualized over the last three months.  The strong growth of GDP in the 4th quarter was mostly due to a return to more normal inventory levels while real final sales remained weak.  Consumer spending has picked up a bit, but only in comparison to the extremely low level of a year earlier.

In the period ahead consumers will continue to be restricted by high unemployment, tight credit conditions, sub-par wage increases, lower net worth and the need to raise savings rates and pay off debt.

A number of factors that helped growth in the past year will no longer be operative in the year ahead.  The cash for clunkers program temporarily spurred auto sales, which have reverted to sluggish sales levels.  The housing credit for first-time homebuyers goosed housing demand for a while, but the extension of the program does not seem to be having the same effect, and, in any event, ends on April 30th.  Furthermore, the Fed's $1.25 trillion program to purchase mortgages ends on March 31st.

As we pointed out in our comment two weeks ago economic momentum already seems to have peaked in the 4th quarter as a number of recent indicators have come in under expectations. In addition, we don't think the sovereign debt problems have ended with Greece any more than we thought the subprime loan problems ended with Bear Stearns.

It remains to be seen whether Greece can carry out its promises of austerity and there is no need for us to dwell on the now well-publicized budding financial crises in the rest of the EU's Southern tier.  As we previously pointed out the debt problems have not gone away, but are in the process of being shifted from private to public entities.

Some may wonder why we continue to emphasize the global financial and economic problems and what this has to do with the stock market.  In our view, this has everything to do with the stock market. The entire rally has been based on the belief that we can undergo a V-shaped recovery and that modern governments just will not allow the kind of unraveling that has followed all other major credit crises.

Governments can only try to halt the malaise by increasing their own debt and running up huge budget deficits that cannot be sustained.  In the U.S., we are already seeing the backlash as the public, while still demanding that the government somehow create more jobs, is also rebelling against the prospect of ever-increasing deficits.

To be continued from the dismaying messages here is President Obama’s policies have become part of the economy’s problem.”

CHART SECTION: Markets are still technically in Downtrends based on monthly viewing [save for only gold]. While the CRB to bonds are in conflict and until moves above all times HIGHS, markets remain in a contra –cyclical rally mode only.  Starting with Blue Chip top 10 Index though to the majors including gold and CRB chartings

MBL 3.08.10 WR – Momentous occasion 8:45 AM