(Editor's Note: A former CNBC market maven and frequent TV guest, Gene Inger is known to move markets with his comments. Gene provides a weekly look ahead at the financial markets for Market Cap subscribers absolutely free. Sign up to receive Gene's daily insights at: IngerLetter.com.)

Power and restraint . . . are the real focuses of this market environment right now; more so than the usual chatter about interest rates, Employment levels, or housing in the raw sense. For instance; the 'power of the Treasury' to consider new ways for the Fed to use proposed regulatory authority to limit if not halt credit and/or asset market excesses, from reaching the point where they threaten economic stability of the U.S. And then there's the question as to whether the Fed would gather the cohunes to try what they propose as a 'macro-prudential' authority to order hedge funds, big banks, and even pension funds, to curtail strategies that put their financial stability at risk.

The idea would be 'leaning against the risk-matrix wind' by attempting to prevent the kind of broad economic dislocations we're going through now, and which aren't over; no matter what Pollyannaish ideas you hear about the credit crisis ending, or general consumer sluggishness becoming more 'typical' of slowdowns (thus easily handled). First of all it's not over; second of all the authorities have been kicked-in-the-tail and are engaged (as we've argued for months); as are the building blocks for recoveries; but the narrowed risk-premiums engineered by interventionist injection, is dicey stuff.

When credit spreads narrow, stock prices rise; and they have. But sustainability in an obviously consumer-driven society, even with (thankfully) a creative nuanced Fed 'at work', is another issue. While we do not fight the Fed (having called the early lows in the Jan-March zone as a 'tentative w bottom', we do believe more testing is ahead of us. And there remains the likelihood that the bulk of consumer 'hurt' is still ahead; and if that's correct (we can't be sure but suspect so), that may well mean the thresholds for capitulation (which may complete the cycle) lay ahead too. That remains our bias.

The Fed has essentially an infinite balance-sheet; and power to devalue our currency as occurred per our warning last year of a forthcoming 'defacto Dollar devaluation'. It was also our (often alone) perspective of the Dollar bottoming along with the forecast stock market ragged rebound, which we thought would generally be capped as it was or may be in the current range (or with a brief sucker-spike overhead and then falter). In any event, proposed new powers for the Fed, require legislation; may thus not be authorized immediately (if at all); but do offer sort of a 'template' for addressing this.

Hedge funds hate this of course; while European central bankers are eager to get the kind of powers Treasury would like to give the Fed. Maybe they know it's coming and that's why they engaged in the 'Emergency Auctions' on Friday, which tell you that it's unlikely the 'crisis' is over as the pundits say, if another $75 billion to counter liquidity shortages are needed. Another reason we suspect that issue is that Fitch, reportedly

is about to drop the ratings on any number of heretofore sacrosanct instruments. So if that occurs; it effects everything from those still-retained (mostly-retained we'll note) SIV's by banks and brokers, to those retained by entities including pension funds.

I don't think that's in the market's current mood (not that we wish it; we don't) but just to be realistic, I suspect we better plan on that occurring. It might even be a part of all the real reasons why Friday's higher ceiling on auction windows got authorized. Don't forget; if certain brokerages hold levels of non-investment-grade securities rising over certain defined levels, it sparks a 'clock' ticking for capital infusion, or liquidation risks.

I believe that's what triggered the waivers when I first spotted Fed action a year ago; and the fact that to this day hardly anybody talks about that shows the limits pertinent data have from reaching general investment communities. That means fear remains I venture to think; because if we were beyond the crisis, we'd hear about it 'historically'.

Restraint applies in another regulatory realm. From the FASB, as since the Financial Accounting Standards Board will be chasing another aspect of the credit 'punch bowl' that's not returning; we have to consider the impact of borrowing costs for companies and consumers as well, in their zeal to preclude a repeat of billions in abusive losses.

If banks have to keep loans the previously packaged on their books 'by fiat' from the FASB; then they can neither easily sell-off nor securitize those as they would prefer. The old (and still current) rules allow those to be off-balance-sheet, which in-self lets us have some suspicions about pending litigation and regulatory form for that reason alone. Gov'mint won't likely intervene here; as it was none other than the SEC asking earlier this year for the accounting board to create new rules for such vehicles. These changes may hold widespread implications for major banks. Not just Citigroup, or JP Morgan Chase; but others to retain billions of remaining off-balance-sheet entities.

We're not arguing that progress isn't occurring; of course it is. But that's not the stuff of a new bull market; it's the stuff of preventing or slowing an irretrievable descent as occurred a couple times in American history (actually three times). We are optimistic in a sense that the banks will find arrangements to take-into-account emergency fund or other methods to prevent ballooning certain aspects of their balance sheets. But at this point it's a very fluid and lively regulatory and accounting area; and not resolved.

Daily action . . . and our outlook for next week, as well as the weekly overview, is via the triple videos provided this weekend; hence our more-macro financial discussion. I also noted during the week our thoughts about the barbarians efforts overseas; what is going on with the North Korean/Syrian axis, and some concerns there. I refer new members to the archives below, here at ingerletter.com, for a review of these subject areas as well as discussions about commodities, oil, and other recent sectors.

The bulls currently are believing the crisis is now orderly and we can advance with an evident visibility for 'conventional' consumer recovery. The bears think this is a phony rally that can't continue. We believe it's the culmination (if a hair longer in time than it seems in price) of the retracement from the 'tentative w-bottom low' months ago now. And we issued our 'into strength' May Day warning because things may not vary that much from what we have had in mind (and as usual we hope we're wrong; because it is our desire for the next important suggestion to be a major not intermediate bottom).

However there is scant evidence for coming out of recession with normal expansions from hiring or spending. The rebate stimulus, if any, is irrelevant in the grand picture. We would welcome a return to a virtuous cycle, but fear resumption of a vicious cycle inline with the other side of the storm. When one is in the 'eye' of a hurricane, only an assortment of emergency repairs are made; you keep the structural ones for after the whack from the other side of the winds. We think that's the case in this environment.

To those who say the Fed hasn't saved the day; we say bunk. They did; we're not in a Depression are we (at least not yet). People are still debating 'recession'. That sure would not be the case if the true solvency issues of the banks had been revealed (we don't even likely exploring the subject) and a mass panic had ensued. So contrary to the nut cases who blamed 'this' Fed; we noted they were on the job with those waiver moves, which saved the Country to this day from knowing how close disaster came.

And by the way that was months before the Bear Stearns 'presumed' catharsis others pinpoint as the seminal event. That was the public even they couldn't shield. All kinds of leverage, and derivatives exposure that was shielded, and continues barely known to the public-at-large, is still out there; remaining a major part of today's threat matrix.

If we are right about that; ask yourself what happens if investors have to grapple with the reality that the full impact on domestic consumer spending and earnings is hardly at a point to discount recovery; that incomes are not and will not rise commensurate, at all, to inflation rates; that the inability of the Fed to hike rates (too much fear still) is a harbinger of more pressure this Summer; that even lower oil prices cannot prevent a non-tax-changed retail gasoline price from thrusting towards $5-6 during the driving season (because of the lag which hasn't passed oil's rise adequately onto gasoline at this point; sorry but that's the mathematical reality); and if war does come against the barbarians at the gates across the Persian Gulf, with oil even higher; try 6-7 gasoline (we don't expect it necessarily; but you know how we assessed it earlier last week); or if you 'ex-out' the benefits from 'transnational companies' to earnings; where is the United States really at. And why do you not think this polarizes on a regional basis as the 'Ag' and 'Oil' states prosper and get stimulus they don't need; while other states in the Midwest; or South are suffering, and aren't helped by poorly-channeled funding.

Now; if we get a backchannel settlement with Iran; the Taliban surrenders so we can avoid bombing Pakistan's mountain sanctuaries for the barbarian fascist Islamists, or the Administration decides to pursue a policy of insourcing not outsourcing; as we've advocated; then something like a more conventional bottoming might be conceivable. We'll keep an eye on this but for now we believe upside thrusts are 'on fumes' again.

Summary: we will not minimize the near-term risk; we're increasingly hovering within the high-end of the forecast multi-month (sorry it's fatiguing, I just listen to the market; I don't attempt to command it) 'transnational' trading range, and that's important (the term), as it is a phony regarding the real stock market, aside those companies with at least a majority of their 'growth in gross' coming from overseas global growth insanity; especially where individual companies have done so without requiring comparable or fair deals for them, or a Nation being smart enough to demand quid-pro-quo deals. At the same time some of the 'bleeding' is being absorbed by a shift to domestic stocks.

Bottom line: macro signs as interpreted; including (updated again soon) the following bullet points:

MarketCast (intraday analysis & embedded Daily Briefing audio-video). . . remarks forecast substantive irregular volatile rallies over the weeks just past; with upward tilt. 'At risk' markets likely return as previous oversolds are 'eliminated'; other aspects are considered in-light of the alternative technical patterns (as explored this weekend via our bias for a shift to domestic centricity as outlined for years actually). Friday action in-line with projections; took a good intraday gain from the sole S&P 1402 short-sale.

In any event we're retaining a macro (forward-roll adjusted) June S&P 1599 short; irrespective of interim oscillations; including periodic contratrend longs (not now as the upside is winding down we suspect). Changes in prognosis addressed if needed.

Special triple play videos this weekend; the first being an overview at midday; then the usual final; followed by weekly-basis chart overview of representative sectors:

Midday Market Comment provides intraday overview<

Other videos (market comments and individual stock analysis) reserved for IngerLetter.com subscribers.

Bits & Bytes . . . provide investors ideas in a few stocks, often special-situations, but also covers an assortment of technology issues (needed for assessment of general factors in tech overall, or as compelling developments call for) that are key movers in the NDX, SOX or S&P, plus ideas ingerletter.com thinks might merit further reflection. (Individual stock comments generally are provided in the video overviews only; once in awhile I'll have some thoughts here, where something's particularly emphasized or of technical nature necessitating some discussion. Increasingly most all is via video.)

Scheduled Economic News Releases:

In summary . . events continue reminding us of risks Allied fighting forces face, given continued attacks on free peoples, by elements including organized terrorist forces in various countries. A world addressing terror threats continues, as domestic issues absorb us more while as we also focus on Middle East and World War III avoidance.

Our 2007 view had been that we're in an ill-defined recession; finally recognized as it evolves. As to whether it descends into something akin to post-railroad debacles way back in the 1880's; is likely what the Fed worries about (as to longevity); while actions affirm they're desperately engaged to stabilize fluidity of functionality. Regression to the mean or traditional affordability 'rules' likely hallmarks of home lending guidelines for years. I hasten to add, whether depressing or realistic (per 3 year forecast here of the housing break combined with 'junk debt' investment avoidance); stocks eventually get interesting. Gilded Age globalists unflaggingly failed to see the era's transition, or detect the public mood of increased populism; essential reform calls; and low taxes.

McClellan Oscillator finds NYSE 'Mac' fluctuating via intervening bull-bear shuffles on the NYSE & NASDAQ. Reflex rallies allowed 'risk off-loading' tactics; as 'Street' debt holdings aren't investment grade. Multi-month efforts evolving. In this regard, we suspect that strategy fluctuates with markets; trying to salvage attractiveness of many stocks, whose expectations remain out-of-line optimistic for the actual world situation.

Issues continue including oil, terror; China (including latest Pentagon hack spying; a type of action that if we were financially sober would provoke warranted redressing), Pakistan; certainly all the Middle East, Europe; funny money NY economics. Noted for a year: includes international dependencies, as outcroppings of a radical extremist globalism which is neither pro-American nor conservative; even as true conservatives support fair trading; constrained spending, and not squandering our US crown jewels.

Sixteen months ago I called this an 'accident waiting to happen'; commenting that is affirmed historically that long-duration periods of free money (Gilded Age mentality) do not create permanent liquidity; but give that illusion while the opposite transpires.

Since early 2007 we noted economic conditions more similar to post the Gilded Age ending in 1929, the panic of 1907 (hence our call for the start to be the 'panic of 2007' last year at the end of that Gilded Age, and it's NOT coming back (party over whether they like it or not, as they didn't or only now 'start' to 'concede' there's needed rehab). It is not a structure entirely resolved by rate cuts, stimulus, 'miracles', arrogance of a few who think they have influence; although all of course have short-run responses.

Current Services Offered by Inger & Co.

• Gene Inger’s Daily Briefing™, a web-based audio-video analytical newsletter providing daily analysis & forecasts of short-term and macro market conditions. Posted 9 p.m. ET each trading evening, the Daily Briefing focus on significant events interrelate potential monetary and geopolitical factors to project impacts on market psychology, and effect on next day action. The Daily Briefing now includes voice-over-charts, and is available at: http://www.ingerletter.com.
  
  
• Gene Inger’s MarketCast™, an email-based, intraday service featuring audio and/or video updates of real-time market action. Movements in the S&P futures contract, plus the Dow, Treasuries, and other market indicators, are the focus. Updates are sent by email approximately 15 minutes after the opening bell, at 10:15 a.m., noon, plus vary either between 1, 2 or 3 p.m. A summary and next day's audio-video projection at our website provided (facilitates remote access). If turbulent conditions or breaking news impact markets, additional audio/video updates are provided. MarketCast™ is available at  805-496-6441.

  - Gene Inger's MarketCast™ . . enables immediate views of market action, given rapid change in this era's ongoing economic, and geopolitical volatility. MarketCast is primarily intended for short-term traders in S&P futures or in techs, plus investors concerned about T-Bond and Dollar markets, as well. Current action and implications for next day trading are provided continuously; via intraday or nightly audio-video.