The State of Things

· China grows, and Chinese stocks go up, and many analysts believe they will continue to. In fact, we see China Mobile (CHL) and Petro China (PTR) are undervalued.

· Turkey is three years behind the market, and will move up dramatically in years. We’re high on GARAN.Turkey, Turyklye Garanti Bankasi on the Turkish Exchange.

This will be hard to find to trade, but check with your brokerage:

http://en.wikipedia.org/wiki/Garanti_Bank

· We are also high on CZZ, Cosan, on the advent of what we think are higher sugar prices.

· Each of these above stocks we will list in our stock charts, and begin posting as buys. We want to buy on any dip to 10,780 or less. And hold.

· We will then hold each of the above positions with a 25% trailing stop loss, in our Speculative portfolio, also utilizing PnF charts.

· If your holdings approach 50, trim positions.

· Silver is actually leading Gold higher, while Gold holds in a trading zone that many believe will be a dip to support lines and several slow months, and others believe will it may follow commodities and the unstable Euro.

· There is a strong likelihood of the S&P below 1160, and the Dow below 10,790

· The NYSE composite and SOX hit new 2010 highs.

· Manufacturing is breaking out. Follow Market Vectors Steel ETF- SLX

SLX is a great ETF. We recommend following classic Pnf stop loss around support lines, watch the moving average, and begin taking profits at 25%.

· Crude is running up beautifully for the summer season, just as planned. Watch 83.20 for a sell signal. There may be a breather to crude

· Bonds should have more upside until late April, when we might have a correction, before a stronger upturn to bonds for the rest of 2010.

· A T & T pays a 6% dividend. How can anyone with cash not put cash someplace like this?

· We’ll go long on the Canadian dollar after a nice 2% correction, and stay long.

· Many Dow Theorists subscribe to our service. For those that understand this first note that it was the Dow transports that hit the new highs ahead of the Dow. Bears then saw that not as much was following along. This is called non -confirmation, or bearish divergence. In our daily OEX I call this “a trading range”. There is tight divergence, bullish or bearish, and we’ve seen many days of even moves up, always to show a bearish influence, but steady grounds.

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· Typically April has sell off built in. The market has edged up day-by-day, but # of stock advances to declines has not been rising. A move to 10,746 and to overall possible 486 point drop from the highest highs, or as low as 10,514.

· Floyd believes proper sell off, or distribution, “shakes out investors” and often then prepares the market for further upside.

· Far from guaranteeing success monopolies and cartels-whether devised businesses or conferred by government regulation-tend to make American companies lazy, fat, and dumb. And in stifling innovation, they shorten a corporation’s life

· And to counter this, French President Sarkozy said: “World economic regulations cannot go on as they are. We can’t accept a capitalist system with rules anymore”

· And Floyd said, “U.S. Stocks posted a fourth straight quarterly gain in the last three month period. The Dow itself rose 4.1%, its best first quarter performance since 1999, yet regulations have not yet begun, and more money in the market is still made manipulating stocks and options, and the facts of shortening corporate life are now false, as the economy is global.

· To the stupid old GOP: The U.S. Treasury plans to sell its 27% stake in Citigroup common stock in the next six months, potentially turning a profit of more than 7 billion. To all those in “The Tea Party” make sure not to mention any of this when you discuss deficits, so as to continue the half lies being spread. This we have found Sarah Palin is best at….stirring up false facts with “cute little lines” like “take America back”.

· Obama’s “drill baby drill” shocked us all, but those that know he is strategic in all of these moves and does plan to “Change” America he promoted this “give strategy” when all of us know that more drilling is not the answer to our consumption. However, Obama plans to push more for environmental protections, lost during the Bush years, and he “gives” before he pushes, I’ll bet.

· 228 stocks on average reached new 52-week intraday highs each day during this last quarter.

· Bullish? Birinyi Associates as top analysts see a 1325 S&P top, which would “translate to a multiple of 17 on the 2010 consensus, neither cheap or extraordinary”. He could be right. Some likely give back would be good, leading to more of a bullish run in 2010.

· The bottom line is that job growth momentum is improving. John Hermann at State Street says “by the third quarter, profits will be at a new all-time record high. That is a plus for the jobs outlook.”

· It’s taken a year, as the market began performing, for corporate profits to begin to catch up. Early last year the corporate profits were made because of the vast reductions in staff. This was a V shape bottom in the stock market; and we are seeing a V shaped chart building in the development of earnings.

· We assume that the first quarter earnings are going to be good, and that this will buoy the market; however, we also believe analysts will be watching and listening to the “tone and comments” of future earnings.

· They will be doing so because the great fear of a W, or a “double dip”, the fear of a return to 9750, will lessen if job growth, higher earnings, and capital spending.

· We’ll see financials again gaining, this time 194% for the quarter. But again, this has a false fact within it, as the value for quarterly earnings in the financial sector was 50 to 60 billion three years ago, will be 20.1 billion this year, and was 6.9 billion the first quarter of last year. We are seeing steady improvement.

· Earnings lead to business spending, which leads to hiring, which leads to consumer spending. The cycle may be returning. Typically 60% of companies beat estimates, so there’s a good chance, analysts think, that we’ll hit 35 to 36% earnings growth.

Thusly the fiber to this commentary shows bullish tendencies, and ones that are stronger than before, and with less euphoria.

The bubble was broken and many people will never return to what they knew, while others will have more than imagined, and more will have less. This is the state of things.

Lean To Trade Calmly

So we find another 50 billion in Lehman stock fraud with Goldman, and Goldman playing the fake financial game with Greece, and the entire EU is affected.

The unraveling continues.

The GOP destroys all that is being attempted, and most of the U.S. doesn’t even know what is being discussed. Washington has become a card game.

90% of stocks are right now straining above their 50-day moving average.

Please, let me help. Keep perspective:

We are spiritual beings having a human experience. Learn to trade calmly, as an art, almost a way of Zen.

Falling in love with a stock is how we trade. We truly know very few stocks, and regularly update them on www.stockcharts.com for your review. We buy both value and breakout stocks, and split our holdings between core, speculative, and “rolls of dice” option and stock trades. Many of our traders use our services at Blue Chip for various types of information.

Telecommunications show the greatest actions while technology and oil and gas are the most out of favor sectors. It is never a bad time to buy more XOM (Exxon Mobil) and Chevron (CVX).

Gold could still hit 1160, but long term we are not as bullish for large increases, but merely stability. Traders may consider trimming or selling positions in GLD and CEF, but continue to hold AU. We will increase GLD and CEF again, never fear.

Crude may top out at 92.00, allowing more upside.

With the Aussie doing relatively well our investment in FAX should profit, as its based on Aussie, and Asian bonds.

With the upsurge the market has shown, and the number of days the market has been up, many analysts see April as a bullish month, with a sell off in May and June.

Upside target on the S &P of 1171.

Here are trends in ETF’s on moving sectors:

Nickel-26%

Biotech-19.66%

Homebuilding-19.12%

In today’s world these %’s will have changed within hours of the writing, and the analyst that shared “we just broke out to a new 18 month high” will be surprised by a 100 point sell off the following day.

It will soon be time to go long the Euro, and we believe the Euro will help the U.S. actually potentially show 3% growth in 2010, not because of our finances, but because of what we see happening with the Euro long term.

For all except the shortest-term players, the important question isn’t whether the market retrenches a bit, but whether this would like seguing into a definitive top.

I’ve said this before: in 1980 household debt was about 50% of GDP; by 2007 it has reached 100% of GDP. Prior to 1980 usury laws were set at 10%; former Fed chairman Volker altered usury laws, allowing interest rates to rise to levels not seen since the days of ancient Rome. Volker with this move did break the back of runaway inflation; however, at the same time the change in the usury laws set in motion the doubling of the debt.

Now couple this with Greenspan’s experiment of unique ways to finance real estate (to keep his bubble going), and finally the great unraveling of our financial pyramid scheme. If one asks the average American the “cause” of the recession over 76% answer “Housing”, when it was only a small part of the meltdown.

However equivocal the message from the FOMC, and for all Mr. Bernanke aims to please, he’s plainly antsy about the ultimate consequences of zero interest rates. It’s time to buy TIPS again, and it’s time to buy long term Treasuries, TLT.

We know TIP, we trade it regularly. Just add this back into your core portfolio, with no trailing stop, and continue to hold.

With TLT, we have not traded this often in this past year, so an update.

When we last sold TLT we netted 20% returns, and we were doing so as a stock.

In 2007 and 2008 we had an amazing run trading puts and calls on TLT as we watched the stock (falling in love with it). Buy TLT when it closes above 91.50

We’ll issue a buy on TLT, no trailing stop, to be held in the core portfolio and also list a call on TLT for the higher risk trader.

Buy both TLT (only other specific market conditions) and TIP and hold

Consider as a call option on TLT the following:

TLT100619C90

TLT JUN 2010 90.0000 CALL

Best buy: When TLT closes above 91.50

Do not trade until it hits this number. Hold for some time, and on any downturn with another 20% drop buys double in your position. Buying at 91.50 assures we are already in breakout

Hold for 80% to 100%, no stop loss

We believe everyone is wrong on the Chinese Yuan, and it will go much higher.

Washington’s emphasis on China’s currency may miss the bigger point of how dramatically the country is changing in other important ways.

IBM remains one of the absolute best buys in the market. Technology is an out of play sector, at a bottom, and IBM stands in a unique position. Continue to buy IBM on any consolidation.