My Thoughts on Today's Market Action

Today's market action was a wild ride to nowhere. As I posted earlier, GDP report today was another indication of inflationary pressure in the market and that it was even more unlikely for the FED to cut rates now. While the Wall Street initially cheered the 2.5% rise compared to the expected 2.2%, this inflationary issues must have settled in. Of course oil's relentless climb to top $66 didn't help. The market recovered some of the losses today to have the Dow finishing up +48.39 to 12348.75, Nasdaq +0.78 2417.88, and S&P 500 +5.30 1422.53. The market basically got nowhere. My point and figure chart analysis shows that major indicies continue to remain on defense.

My take is this. I think that the Iranian crisis, yes I will call it a crisis, will linger longer than anyone gives it credit for. I don't know if this will blow up into a full scale military confrontation between the US, Great Britain, and Iran, but certainly, Iran has no incentive to end this hostile hostage situation. This is because since they grabbed the 15 British sailors and Marines, the oil has jumped from $58 to $66 in a matter of one week. Since this oil revenue dependent nation is also cash strapped to continue on with their nuclear bomb quest (which they deny is for energy production). I honestly don't think that they will release these detainees or hostages until oil hovers at least above $75 per barrel. However, US has recently stepped up its military presence of 2 air craft carriers and intensifying its military exercises near the Iranian coast in a show of force. Tony Blair seems to be escalating his tone towards Iranians. i don't thin UN will be able to resolve anything. "UN"able should be the name placed to UN whose best days have passed and stands as a reminder of excess and incompetence.

All of these things point to continued rise in inflation and those that are hoping for a rate cut are in for a long wait. It just won't happen anytime soon. The path of least resistance still remains to the "downside". I still stand firm on my analysis that our economy will see more tough times ahead before seeing the good times.

CFC finished below trend line today and reversed to finish on the low range of the trading range on below aveage volume today. This is a bearish reversal. I anticipate that the next support will be found at $32 level and if it breaks below this, we can expect this stock to quickly test the $29 to $27 support level.

BIDU failed to break out of the $105 resistance level and sits poised to test the $93 200 SDMA. If that is broken we can expect to see $85's in relatively short order.

I still remain bullish on LHCG which has held up rather well during these turbulent times.