Resistance is (for now) Support

After clearing the bogey at S&P 1405 at last in the previous week, the index has now pulled back to that level and for now bounced off it... hence old "resistance" now becomes new "support". It will be interesting to see if this holds but I expect it to do so for now.

Some other thoughts

1. As I've said in the weekly round up, the "strong dollar" fantasies have usually lasted 5-10 days or so... it was nearing midnight. With crude north of $120 and the dollar returning to its rightful place as the junk of the world, we might be done already. This happens like clockwork now almost every 6-8 weeks. As I wrote in detail last week, the fundamental issues facing our country do not allow for a stronger dollar... we continue massive deficit spending and we print money like mad to solve our problems. This is not a recipe for good, and Warren B agrees. All dollar rallies, while some might last days, some weeks, and some months - will be temporary. We are on a long term course of pathetic... and our only "hope" is Europe joins us in purgatory and starts cutting rate. But that's not exactly a bullish call on the US
   
2. Apple (AAPL) got 2 upgrades today - its a slow day and I don't normally report the upgrades/downgrades because they are relatively meaningless to me... but if you are interested here is some meat (this is one great chart by the way, looks like its headed to $200 if the market does not sell off) - Apple shares rose modestly Monday after an American Technology Research analyst raised his rating to "Buy" and an RBC Capital Markets analyst increased his price target for the computer and gadget maker's stock. In his Monday note, Wu said he still sees a "potential product vacuum and drawdown in inventory in the June quarter" but thinks this is fairly known and that investors will be more focused on products launching in the second half of the year. "We see upside potential to iPhone estimates following changes, in our opinion, Apple may make to its iPhone business model, expected to accelerate momentum and expand its global addressable market," he said.
3. Speaking of Apple, the cover story of BusinessWeek is a theme I've been promoting since the blog began [BW: The Mac in the Gray Flannel Suit] ... as an entire generation of kids, teenagers, and 20somethings enter the workforce, we could see a seismic shift to Macs in our corporate environment. This won't happen easy (the incumbent gorilla won't give up) and it won't happen overnight but would be the type of thing that would simply be enormous. Even if 15-20% of enterprises switch over to Apple, it will give us years upon years upon years of earnings expansion. Remember, this is an "entertainment company" combined with a hardware company - they are hitting on all cylinders on both sides of the business. I cannot stress how far ahead this company is thinking; it is like a master chess champion - while some of it's investor base are playing checkers - they only care about the most recent earnings report and sell the stock off as if the end of days is coming if guidance is not "correct"; those are all opportunities on what I consider a decade long investing opportunity. I truly think this company will be at the heart of the living room, and potentially office - at the same time, and is probably the only tech stock I'd feel comfortable leaving for a fishing trip for 5 years and holding in my portfolio.
   
4. Tomorrow we have an avalanche of earnings, both inside the fund (our holdings) and out. Tonight we have Gafisa (GFA) and Cleveland Cliffs (CLF) report after the bell today. I did add a bit back to my Gafisa position since I sold a lot right below $50 Friday and we have a pullback below $45 (so I got those shares back at a 10% discount) but I am hoping for some sort of disappointment and get a sell off to $40 (or below). I doubt it, but I can hope - I did not add a ton. Same for CLF but with locked in iron ore prices it is going to be hard to disappoint - fingers crossed ;) (I know, it sounds strange to be hoping for misses and disappointments from stocks I own, but I am looking long term and when I am underweight positions I'd rather take short term hits so I can acquire better prices for longer term stakes)
   
5. Since I highlighted Walter Industries (WLT) Thursday evening its up from $66 to $81. Nice. (no position though) I hope someone made money off that call since it was the entry with the most hits the last 96 hours [Walter Industries - the Most Interesting Company] Looks like they received 3 analyst upgrades to boot (err, up to $83 now)
   
6. Pilgrims Pride (PPC) joins Tyson Foods (TSN) and all the major food producers in telling us what a disaster ethanol is. Their input costs continue to go up, and we continue to lose jobs in our heartland as they close plants. But hey, we won farmers votes. I continue to stress to you to stock up on meats. They will be going up in price meaningfully in a few quarters. Of course it won't show up in any government inflation report, but I am talking "reality" versus the "fantasy" of government statistics. I do think now that it won't be people dying in 3rd world countries but a very peeved American electorate that will cause ethanol subsidies to be reduced - but not until after this election. "While we continue to pass along price increases to our customers, the simple fact is that to date, we have not been able to raise prices fast enough to match the extreme price volatility in the grain markets," Pilgrim's Chief Executive Clint Rivers said in a statement. Rivers also warned that consumers will be paying more for food as these higher costs are passed on. "American consumers are only just beginning to feel the impact of sharply higher food prices," he said. "The operating environment for chicken producers today is the most difficult I have seen during my 27 years in the business," Rivers said.
7. I really should be charging for this level of insight ;)