- Analytical Commentary -

January 27, 2010 (FinancialWire) (By Dr. Joe Duarte) — Apple (NASDAQ: AAPL) is expected to unveil its tablet today. That’s great, and they’ll sell millions of them. But if you look around that’s not the biggest potential trend for the future.

It’s kind of eerie, as the S&P 500 has closed just about at 1090 for the last three trading days as traders don’t seem to want to make any lasting bets. The markets have tumbled below key support levels, but are essentially frozen, waiting for something to happen.

And that something could come on Wednesday evening, after the U.S. market has closed, as President Obama will make his State of the Union address. To be sure, the speech will be thoughtful and will be delivered flawlessly by Mr. Obama, an eloquent and elegant speaker. The words will then be parsed, analyzed, and argued over clinically, emotionally, and cynically. The spin meter will be on high on both sides of the aisle. And at the end of the evening, we probably won’t know much more than we knew when it started.

Sure, there will be token moves toward cutting spending and the budget deficit. There will be talk of reassessing health care and not giving up. There will be mentions of bipartisanship and looking out for the middle class. And yes, there will be talk of better days ahead, but also warnings that the road will be bumpy and that much pain and sacrifice will be required. But there won’t be talk of extending the Bush tax cuts, and there won’t be any real concrete measures announced that would lead to a boom in new jobs.

All that’s already baked into the cake. What the markets want is a sign that the White House will move toward the middle and that Congress will be gridlocked. We’re not sure that either of those things is going to happen in a way that helps anyone. The way we see it, Mr. Obama can’t or won’t move to the center. The far left isn’t going to give on anything, and neither is the far right. That means that things will stay where they are, leaving the taxpayers, employers, workers and consumers with a double whammy hopelessness, and helplessness, which translates into frustration, and apathy in the short term, but significant anger at some point in the future.

So what’s the problem with that situation? Isn’t that gridlock? Doesn’t it mean that at least bad policy won’t make it to the real world? The problem is that when neither side gives in or looks for some kind of solution, the party in power and with the majority will do everything that it can to get whatever it can get done before the election. And that means more uncertainty for the markets, as the Democrats, despite the Brown election to the Senate, will regroup and again try to advance their agenda, at any cost.

How does anyone trade this market? Very carefully, while noting the following. Stocks and commodities are looking toppy. The dollar is gaining strength. Commercial real estate is wobbly. And China looks to be just getting started on tightening monetary policy.

Those are five possible emerging trends that are tradable and for which there are many trading vehicles. What we’re saying is that this could be a time when stepping away from politics and looking at some charts may be a whole lot more profitable than many people are willing to admit.

[Go to http://www.financialwire.net/?s=joe+duarte to see more commentaries by Dr. Joe Duarte.]

The FirstAlert(tm) Economics Calendar lists New Home Sales for December (10 a.m.), Treasury Secretary Geithner speaks (10 a.m.), EIA Petroleum Inventories (10:30 a.m.), Treasury auctions 5-year notes (1 p.m.), FOMC Meeting – Policy Announcement (2:15 p.m.), President Obama State of the Union address (9 p.m.).

The FirstAlert(tm) Events Calendar showcases GSAT Investor and Media Event; MOH Investor Day; ORCL + SUN Strategy Update; PRXL, LCAV, ATHN, PFWD at Jefferies Global Healthcare Services Conference; TCK at TD Mining Conference.

FirstAlert(tm) Website of the Day: http://www.the-scorpions.com/english/

Quote of the Day: “It is necessary for us to learn from others’ mistakes. You will not live long enough to make them all yourself.” Admiral Hyman G. Rickover

Today is: Holocaust Memorial Day.

Happy Birthday: Wolfgang Amadeus Mozart, Lewis Carroll, Samuel Gompers, Jerome Kern, William Randolph Hearst, Jr., Hyman G. Rickover, Skitch Henderson, Elmore James, Donna Reed, Troy Donahue, Nick Mason, Mikhail Baryshnikov, Keith Olbermann, Bridget Fonda, Alan Cumming, Patton Oswalt, Marat Safin.

Today in History: The trial of Guy Fawkes and other conspirators began in 1606, ending with their execution on January 31. The University of Georgia, the first public university in the United States, was founded in 1785. The U.S. Congress approved Indian Territory (in what is present-day Oklahoma) in 1825, clearing the way for forced relocation of the Eastern Indians on the “Trail of Tears.” The National Geographic Society was founded in Washington, D.C. in 1888.The Red Army liberated the Auschwitz-Birkenau concentration camp in Poland in 1945. Nuclear testing at the Nevada Test Site began in 1951 with a one-kiloton bomb dropped on Frenchman Flat. Astronauts Gus Grissom, Edward White and Roger Chaffee were killed in a fire during a test of the Apollo 1 spacecraft at the Kennedy Space Center in 1967. More than sixty nations signed the Outer Space Treaty in 1967, banning nuclear weapons in space. The Paris Peace Accords officially ended the Vietnam War in 1973. Western Union discontinued its Telegram and Commercial Messaging services in 2006.

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