State of the Union called for drastic budget cuts and a halt to earmarks due to the looming fiscal crisis and major investment in education, infrastructure, and basic sciences along with energy. When a politician presents such a blatant obfuscation he falls on the old standby, the budget freeze. There have been many freezes instituted by the inept in the past. They fail to deliver the savings proposed and drive out what few productive workers remain. The debt ceiling will not be raised in the House without much more cutting and this will be oblivious to whatever budget the president sends down. Surely they will do the freeze but that is a small part of what Tea Party wants. They don't have to negotiate with the Senate, all they have to do is block the ceiling increase by vote in the House and the Senate will come to them. The president has no control over earmarks. So in several ways this is the first real test for these freshmen Tea Party congressmen to resist the siren call of appeasement from their elders. The pressure on them will be tremendous. Let's see what they are made of. If they hold up then the Republican party will no longer treat their platform like toilet paper (at least until the next election).
I will be leaving for Albuquerque at 2:00 EDT for doctors. I'll return tomorrow. So I'll miss the Fed announcement fun. To clear the decks I bailed out of SSO right after the close yesterday...oops. However, if EWI is right then SPX will not make a new high and DJI will stop at 12,035 (wave 5 equal to wave 1). So far SP futures have made a new high by 2.75 points but my eyes will be on the cash market. If SPX impulsively takes out it's old high then the stock market will extend another 2 waves in line with what I1 expects.
The dollar fell somewhat overnight and it's hourly M/A has declined to it's current 78.41. Adding 24 points give me my stop buy. The equivalent M/A in the Euro is 136.24 and rising.
Gold still respects it's 10-minute M/A and my stop is now 1341.
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