The markets were positive for most of Friday but global headlines and earnings misses produced too much uncertainty for traders to hold long positions over the weekend. However, the indexes posted their first positive week for 2015.

Market Statistics

On Friday the Dow was handicapped by the weeks -$3.50 plunge in oil prices to $45 with Exxon and Chevron heading the list of losers. The Dow Transports lost -161 points after UPS lost -10% on higher than expected holiday costs.

The Nasdaq posted the only gains for the day with support from the Netflix, Starbucks, Google, GoPro and Zillow.

The market week was looking good until Friday's open and everything began to fall apart. There was an attempt to move higher throughout the morning but there was no volume and no conviction. The death of King Abdullah caused uncertainty about the current policies on oil, the alliance with the U.S. on terror and whether terrorists would take advantage of the change in leadership to attack Saudi Arabia.

There was also profit taking after the big reactionary gains from the ECB decision on QE. After multiple analysts talked down the possible economic impacts of that move and the potential for Europe to continue sliding towards the abyss it is not surprising that traders wanted to take profits on Friday.


On the economic front the Chicago Fed National Activity Index showed that U.S. growth slowed in December. The headline number fell from 0.92 to -0.05 and the first negative reading in four months. The production component fell -0.12 after a -0.1% decline in Industrial Production.

However, here is the key point. A slowdown in "oil related activity" also contributed to the decline. Oil companies buy stuff that is manufactured in the U.S. and they are going to be buying a lot less in the coming months.

Hiring also declined from November's level of +353,000 to +252,000 and this weighed on the index. Housing permits also declined along with retail sales.

All is not well in the U.S. economy despite being the best house on a bad block.

On the positive side the rate of Existing Home Sales for December rose from 4.93 million to 5.04 million. That was actually below expectations but still a gain of +3.5% from the prior December. Sales in the Northeast declined -2.9%, Midwest -3.5% and rose +3.8% in the South and +9.8% in the West. The supply of homes on the market declined from 5.1 months to 4.4 months. The average home price rose slightly from $207,200 to $209,500.

However, only 29% of the home purchasers in 2014 were first time buyers. That is a three decade low and suggests there are still challenges in the economy. Wages are declining. People are forced to work two part time jobs because they can't get 40 hours at their primary job and credit requirements are still very high.

With 30-year mortgage rates near record lows we should see a surge of buyers as spring approaches. Mortgage applications surged 49.1% the prior week and +14.2% last week. In the prior week when applications surged, 66.4% of them were refinance applications.

The SEMI Book-to-Bill ratio fell from 1.02 in November to 0.98 in December. Orders have been lower than billings for 3 of the last 4 months suggesting demand is slowing. Bookings were $1,366.2 billion compared to shipments at $1,391.9 billion.

The calendar for next week has some definite problem areas. The Greek elections on Sunday could throw Europe into a tailspin if the left wing Syriza party wins as expected. Less than 18% of the public approves of the current Greek leadership and they have experienced two years of crushing austerity and 29% unemployment. This has given rise to Syriza party pledging to renegotiate the bailout terms on the nearly 200 billion euros of loans. The rise of "protest parties" in the polls suggests trouble ahead for Greece with the potential for an exit from the euro. However, in the last couple weeks the Syriza has tempered its comments on an exit probably in an attempt to attract more moderate voters to the party.

On Wednesday the FOMC will give us another update on their plans to raise rates later this year. This is not a quarterly meeting so there is no press conference. However, since there have been significant changes in the economic outlook, oil prices, the rise in the dollar and the QE from the ECB the post meeting statement could be different than what we got after the last meeting. This could be a challenge for the market.

Lastly the first look at the GDP for Q4 will be out on Friday. The official consensus estimate is for a decline from +4.97% in Q3 to +3.1% in Q4. However, there are multiple individual estimates in the 2.0% to 2.5% range. If the number comes in much under the 3.1% consensus it would cause some market stress since there is already some concern about the economy slowing.


Two new splits were added to the split calendar this week but neither are exciting. NJ Resources (NJR) is a small energy services holding company that supplies natural gas to about 504,000 customers in northern New Jersey. Westmorland Resources (WMLP) owns 15 surface mines and six mining complexes in eastern Ohio. The 5:4 split is uninteresting and shares outstanding at only 898,000 makes it untradeable.


The move by the ECB to launch a monster QE program disrupted currency markets around the world as the euro collapsed and moved even closer to parity with the dollar. The main points of the program are as follows.

Each of the 19 central banks in the eurozone will buy bonds issued by its own government and take the losses should that government default. That solves the problem of taxpayers in one country getting hit by losses in another country. Of course that only emphasizes the main problem that the eurozone is not one country but a loose collection of 19 different economies each with its own problems.

The program will begin in March and the 19 banks, using new money from the ECB, will buy a total of 60 billion euros of bonds every month until at least September 2016 or until inflation rises to the 2% target. The theory of QE is that it will lower the interest rates and make it more attractive for companies to increase investments and thereby grow the economy. By making the program unlimited in duration it shows the central bank is committed to fighting deflation however long it takes.

The side effect of the bond buying pushing interest rates lower is the deflation in the currency. A cheaper euro means products from Europe are cheaper and exports should rise. However, in order to offset the decline in the euro other countries are faced with their own currency problems. If the euro goes down it basically means other currencies are rising. Stronger currencies mean exports from those countries will decline. It is called a currency war. Everyone, except the USA, is working to weaken their currencies to maintain the status quo.

In addition to the ECB action and the Swiss removing the peg on the franc we also saw central bank actions from India, Denmark, Canada and Peru. Others are sure to follow.

Currency war cartoon from Hedgeye.

The downside to this is the dollar strength. With all the other countries pushing their currencies lower the U.S. dollar surged to a new 11-year high. That means U.S. companies are going to have a lot harder time selling overseas. We have already had a multitude of warnings about "currency headwinds" and the earnings cycle is just getting started. With the euro headed for parity with the dollar that means the dollar strength is only going to increase.

A sharply rising dollar means a continued fall in commodities. That means more deflation in costs and lower profits for producers. We may have just seen the ECB trigger an entirely new round of deflationary concerns.



The earnings calendar for next week has 25% of the S&P 500 reporting. The most watched events will probably be Apple on Tuesday, Facebook on Wednesday and Amazon, Alibaba and Google on Thursday. Over 450 companies report earnings this week. By the time this week is over we should have a very good idea how the rest of the cycle will play out. Only 179 companies have reported for Q4 and 60% beat street estimates on earnings and 60.1% beat on revenue. As the earnings progress they normally worsen as the big companies report early and smaller companies report later.


UPS upset the market on Friday after it warned that Q4 earnings were going to be ugly. The company spent millions to prevent a repeat of the 2013 holidays when a last minute flood of packages and bad weather led to more than a million packages not being delivered before Christmas. Unfortunately all that extra spending helped to avoid the late deliveries this year but it also led to higher costs that weakened earnings. The company said they expected package volume to rise +11% in December. They prepared for the "extreme spike" on Cyber Monday and again on December 22nd the last shipping day before Christmas and those problem days were handled. However, the company said package volume the rest of December was lackluster. They had far more staff on hand than they needed and the lack of volume led to higher costs per package. The peak staffing led to higher training costs and inefficiencies related to contract workers.

UPS now expects full year earnings of $4.75 compared to prior estimates between $4.90-$5.00. Analysts were expecting $4.96. For Q4 they now expect to earn $1.25 compared to $1.47 analysts expected. The company said strong "currency headwinds" would negatively impact results for 2015 and growth would be below their prior expectations of 9% to 13% for the year. UPS shares fell -10% on the news and knocked nearly 1.8% off the Transport Index.


Zillow (Z) soared +13% early in the day but faded to +8% by the close. The motivation for the move came from news regulators were going to approve the merger with Trulia (TRLA). Zillow is buying Trulia for $3.5 billion in stock. TRLA shares rallied +10%. Shares in both companies had declined significantly since the merger was originally announced.


Netflix (NFLX) shares are still in rally mode after the big earnings win on Tuesday evening. Shares are up almost $100 since the report. The big jump in Netflix shares was a major mover of the market on Wednesday. The company said it expected to complete its international roll out to more than 200 countries over the next two years and "generate material global profits from 2017 forward." Subscribers outside the U.S. rose by a record 2.43 million in Q4 to 18.3 million. They expect to add another 2.25 million in Q1. Netflix said it was planning on producing 320 hours of original content in 2015. That is three times the amount produced in 2014.


Starbucks (SBUX) exploded higher with a +7% gain to a new high after the company reported earnings that rose +82% to $1.30 compared to 71 cents in the year ago quarter. That met analyst estimates but the company said same store sales rose +5% compared to 1% in the year ago quarter. CEO Schultz said one in seven Americans received a Starbucks gift card for Christmas. More than 2.6 million cards were activated on Dec 23rd alone.

Starbucks has been expanding its food line and offering alcohol in some stores. The pilot programs have been so successful they are expanding the roll out to hundreds of additional stores. The company is now allowing customers in 150 stores to order their drinks online through their smart phones. That is expanding to 600 stores in Q1 and then nationwide later this year. Starbucks already processes more than 7 million mobile payment transactions every week. Over 13 million U.S. customers are using the Starbucks mobile app, up +30% since March, with more than 9 million using the mobile payment app. Schultz said numerous companies were knocking on the door to gain access to the mobile payment app technology for their own stores.


GoPro (GPRO) shares rallied after the company signed a deal with the National Hockey League to put cameras on players to put fans closer to the action on the ice. The partnership begins this weekend with the All-Star game. The cameras will transmit live HD video for broadcast. This is the first partnership with a sports league but you can bet there will be more. This is a big win for GoPro and could mean an end to the decline in the stock. Earnings are Feb 5th.


Got BOX? Shares of the cloud computing company were priced at $14 on Thursday night and closed at $23.15 for a +66% gain. Somebody priced that IPO too low. Analysts were surprised at the reaction to the IPO since Box lost $121 million for the first 9 months of 2014. Rapid Ratings, which rates companies on financial health on a scale of 0-100 gave Box a 23. The CEO of Rapid Ratings said the company had about a year to prove itself or be in serious trouble. They are spending twice what they earn and recently went through an identity crisis.

Originally they were going to compete with DropBox and Google Drive and sell to individual consumers. They suddenly changed direction and now sell only to corporate accounts. They have 44,000 paying customers including NBC, Fox and General Electric. Rather than just a place to store photos and emails they are focusing on developing tools for enterprise users to share and collaborate on stored data. Revenue for the first 9 months of 2014 rose +80% to $154 million.


Kimberly Clark (KMB) posted adjusted earnings of $1.35 which missed analyst estimates at $1.37. Revenue of $4.83 billion also missed estimates of $4.91 billion. The company warned that sales were expected to fall 3-5% in 2015 and that would reduce earnings from the current $6.00 estimate to a range of $5.60-$5.80. The reason for the big drop was the strong dollar and weak currencies elsewhere. The company expects the strong dollar to reduce revenue by 8-9% in 2015.

When overseas sales of Kleenex and Huggies diapers are impacted by the strong dollar you know that higher priced items from any U.S. company are going to be impacted as well. Kimberly Clark gets about half its revenue from international sales. In 2014 the company benefitted from strong demand in Brazil, China, South Africa and Vietnam helping to offset declines in other countries. In Q4 the company said volumes fell significantly in Venezuela as a result of the currency crisis there. Nobody has any dollars to pay for importation of their products and the official exchange rate of 6 Bolivars to the dollar is not even a fraction of the black market rate of 184 to the dollar. It makes no sense to accept Bolivars for your imported products. Shares fell -6% on the news.

This is a very obvious sign that the dollar strength is going to be a challenge for S&P earnings since about 50% of the revenue on the S&P comes from international sales.


Honeywell (HON) reported adjusted earnings that rose +15.3% to $1.43 that beat estimates of $1.42. Sales declined -1.1% to $10.3 billion and narrowly beating estimates of $10.2 billion. However, Aerospace sales declined by -6% to $4 billion as a result of the strong dollar. They reaffirmed full year guidance of $5.95-$6.15 and sales of $40.5-$41.1 billion. Analysts were expecting $6.11 and $41.7 billion. The company blamed the strong dollar and currency translation issues for the weak forecast. Shares responded positively to the news with many analysts expecting an earnings miss.


Market

We have reached the fork in the road as Johnny Carson joked so many times in decades past. The rebound last week from oversold conditions was basically a short squeeze and traders positioning themselves ahead of the ECB decision. The S&P rebounded to prior resistance at 2,064 and stalled. The coming week is going to be crucial for longer term market direction.

The FOMC meeting, the GDP and the Employment Cost Index could represent potholes in the rally road. Earnings reports from 25% of the S&P could either propel us higher or kill the rebound depending on the results. Eventually the strong dollar excuse will be a "get out of trouble free" card once enough companies use it. Initially it could be a slick spot in the market's uphill climb. We have seen in quarters past when there is a common excuse that is not the fault of the companies that the excuse is eventually ignored. Investors just accept it and overlook it. I don't think we are there yet although Ford (F) warned it was taking an $800 million charge for currency issues and the stock declined only 12 cents.

The election in Greece will be a lingering trouble spot all week. Whichever party wins they will have three days to form a coalition. If they can't form a coalition the country would be forced into new elections. They need 38% of the vote for a parliamentary majority and the Syriza party is expected to win with only 32.5% of the vote. There are 22 parties in the election. Syriza will have to form a coalition with one or more to reach the 38% control needed for Parliament. Since only a handful of those 22 parties will garner the minimum 3% of the vote to gain a seat in parliament that will limit the possible coalition partners willing to join with Syriza. Greek elections are very confusing because of the wide number of parties and the rules governing the resulting parliament. This means just winning the election on Sunday is only the first step and we will be faced with Greek headlines for the rest of the week. Assuming Syriza does win and is able to form a coalition they will then have about five weeks until the payment deadline on the nearly 200 billion euro loan from the Troika bailout. Syriza claims they are not going to pay it and will scrap existing austerity measures and those headlines will roil the European markets.

Now that the State of the Union is behind us the next problem from Washington will be the expiration of funding for the Dept of Homeland Defense on Feb 27th. Congress is going to use that deadline to pressure the president on his executive actions on immigration. While this is not as big as shutting down the entire government it will be a huge fight with homeland defense as the main topic. With terrorist actions rising the administration will be hammering home the point that we can't do without homeland defense. It could become a very high profile skirmish between the president and Congress so once Greek headlines fade the funding headlines will begin.

Don't you wish this was the good old days when all the market had to worry about was earnings and analyst recommendations?

While all these problems exist in our immediate future we have no idea how they will play out. We need to just follow the charts and not get married to our positions. All the charts are showing key resistance levels and a failure at those levels could lead to another round of market weakness.

The S&P level to watch is 2,064 and the resistance high from January 9th. If we don't exceed that level it would be another lower high and project the potential for a lower low in the days ahead. Breaking through and closing above that level would be bullish and project a return to the December highs at 2,093. Clearly a move through 2,064 would trigger additional short covering but not guarantee a breakout to new highs. There are far too many headlines in our future although bull markets do like to climb a wall of worry.


The Dow failed to return to the January resistance highs at 17,915-17,923. Friday's resistance failure at 17,800 was a lower high and right at downtrend resistance from the December highs. What we have is a triangle forming and eventually there will be a high velocity breakout but today the direction is unknown.

The Dow is particularly at risk because the Dow components are all international companies. They will all have significant currency issues and earnings problems.

Support is 17,275 and resistance 17,800 and 17,915.



The Nasdaq 100 was my key index for the last two weeks and it outperformed by a mile. The index gained +3.28% for the week compared to +0.9% for the Dow and +1.6% for the S&P. The Russell 2000, normally the best performer in January gained only +1.0%. The Nasdaq 100 made a higher high and came very close to downtrend resistance at 4,300 with a high at 4,292 on Friday. The Nasdaq big caps will be driven by the Apple earnings on Tuesday. Traders will be cautious ahead of the event and then follow Apple on Wednesday. Microsoft reports on Monday and they could also be a lift or an anchor.

This is a somewhat bullish chart with the triple bottom just below 4,100 and the approaching resistance test at 4,300. If the $NDX breaks through that 4,300 level it will be very close to a new relative highs at 4,321 for December and 4,337 from December. If the large caps decide to run they could drag the rest of the market with them.


The Nasdaq Composite is less defined but the objective is clear. Resistance at 4,800 from November would be a triple top head and shoulders formation if the index failed at that level. The 14 year high in December of 4,813 would be the next challenge. The Composite index could struggle if a lot of the smaller stocks start missing on earnings. I would rather key on the $NDX and let it pull the composite index along.

Support 4,570 and resistance 4,800.



The Russell 2000 is underperforming and stuck in its recent range between 1,150-1,190. The small caps are being avoided even though they are primarily U.S. focused and have little currency exposure. The weakness stems from the constant whining about deflation in Europe contaminating the rest of the world economy and eventually dragging our markets lower. Since most small caps are U.S based this European malaise excuse is unfounded.

However, we have to trade what we see rather than what we believe. If small caps are not performing then trade something else. This is a stock pickers market rather than a market of stocks.


The NYSE Composite is still the weakest index. This is probably due to the number of energy and financial stocks in the index. This is a market breadth indicator and it is telling us the broader market is still weak.


The Dow Transports collapsed on Friday with a -1.7% decline thanks to UPS. Earlier in the week the transports tried to rally with the market but the effort was lackluster despite the low prices on oil.


The Goldman Sachs Commodity Index continues to decline with Friday's close the lowest since the financial crisis. Copper, iron, coal, oil, etc continue to push lower as institutional traders are forced to close positions to escape margin calls. Speculators continue to short the commodities because of the rising dollar. It takes less dollars to buy the same pound, barrel, etc, and because of expectations for lower demand in Europe.


I am neutral on the market for next week because of the whirlwind of cross currents in the headlines and the various economic events. This could be a very choppy week for trading. Try not to launch a lot of big bets because the market will almost always go against you when there is a lot of money at risk. Maintain small positions and trade in the direction of the trend. After this week we should see the market turn directional based on the combination of all these events.

Random Thoughts

Many U.S. companies have assets stuck in Venezuela which they are unable to extract. American Airlines (AAL) has $721 million held in the Venezuelan Bolivar currency. It can't remove this money from the country because it can't get dollars in Venezuela. If the airline converted the money at the current market rate of 184 to the dollar they would only receive $25 million. Overall foreign companies have about $16 billion in cash in Venezuela that they can't repatriate. These companies are going to have to take significant charges for currency conversion in their future earnings. Currently the official government exchange rate is 6.4 Bolivar's to the dollar but nobody is willing to do the transaction. There are no dollars in Venezuela. The government said on Friday it is considering merging the three exchange rates that exist and the result would be something in the 50:1 range but even at that level there are no dollars to exchange. If the government does devalue the Bolivar every company with dollars held hostage will be forced to take a charge on their statements. Expect a lot of Venezuelan line items in the coming earnings reports. P&G, Ford, General Motors, Baker Hughes, Brinks and others have already announced charges.

Saudi Arabia is in trouble. King Abdullah died last week and King Salman has taken over as his successor. Immediately the new king is facing a world of problems. With Iranian backed rebels taking control of Yemen last week and the U.S. backed government dissolving that is one more country bordering Saudi Arabia that is hostile to that country. Iranian backed rebels or Iranian troops now control significant portions of Iraq, Syria, Jordan and Lebanon.

Saudi is currently constructing a high tech 600 mile long border fence along the Iraq border to keep ISIS and refugees from Iraq out. Called the Northern Border Security Project it is a high tech way to provide alerts if ISIS decides to cross the border into Saudi Arabia. One of the ultimate goals of ISIS is to capture Saudi Arabia, home to the "Two Holy Mosques" of Mecca and Medina. The project had been discussed since 2006 but work began on a crash basis in September after ISIS began charging across Iraq. The border defense zone includes five layers of razor wire fencing, watch towers, night-vision cameras and radar cameras. There are underground censors, sand berms, reconnaissance vehicles, 240 rapid response vehicles, helipads, 1,450,000 meters of fiber optic cable and 30,000 troops. Despite all this preparation this may not be enough to protect the country with Iranian backed forces on nearly every side. Description of fence with pictures

If those are not enough problems the new king is 79 years old, is partially crippled by a previous stroke and suffers from dementia.

Since the attack on Charlie Hebdo in France more than 19,000 French websites have been hit by cyber attacks according to a top French security official. Many of those were carried out by well-known Islamic hacker groups. The sheer volume of attacks had never been seen before according to French officials. Military authorities have launched round the clock surveillance to protect government sites coming under attack.

In the unbelievable but true column President Obama agreed to be interviewed after the SOTU speech by GloZell, a self described YouTube star with more than 3 million subscribers to her channel. Her claim to fame is filling a bathtub with milk and fruit loops and then swimming in the mess while slurping up the cereal. Other programs on her channel include stuffing a condom up her nose. Meanwhile the president refuses to meet with Israeli President Netanyahu when he visits the U.S. in early March.


The president has also refused to put combat troops on the ground in Iraq but there are rumors there will be U.S. military advisors (translation = SEALS) on the front lines when the Iraqi military attempts to retake Mosul in the coming weeks. The retaking of Mosul is likely to be an intense and long lasting battle. Coalition forces have intensified air strikes around Mosul in an effort to cut supply lines and degrade the forces currently holding the city. General Dempsey said the U.S. advisors would "support Iraqi forces on the ground." They could call in air strikes and direct Iraqi forces during the battle. Anyone close enough to do those things would have to be close enough to be targeted by ISIS artillery.

Business Insider published a great chart of past bull/bear markets and their durations. This reduced size version is a little hard to read but click the link for the full size version. It is worth the click. Bull and Bear Markets


Despite the weak economics, record lows on the 30-year treasury, monster QE in Europe and shrinking economies in China and Japan, the Fed is still pushing the mid-year rate hike scenario. They believe the falling oil prices are going to be so stimulative to the economy that rate hikes will be necessary to slow inflation. We don't have any inflation now but they are convinced it will appear by summer. Future employment reports could throw a wrench into their plans. With hundreds of thousands of energy related workers losing their jobs it will be tough for the economy to offset that drain. Also, removing hundreds of billions in spending by energy companies is going to be a serious drag on GDP. Thanks to cutbacks in energy employment initial jobless claims have risen about 50,000 per week since the cycle low in October. Stay tuned!

A survey by ConvergEx Group of 306 investment professionals found that crude prices are just $17 away from triggering a global recession. They found that at some point low oil prices are no longer stimulative and the decline in exploration and production spending triggers a global slowdown. The $30 level is the most common trigger point according to the analysts surveyed. $35 was the second most common level listed with 26% of respondents believing that would trigger the global recession. Over 68% of respondents believe oil prices have not yet bottomed.

Active rigs drilling for oil and gas declined -43 to 1,633 for the week ended on Friday and is now down -15% from the highs at 1,926 back in September. This is the lowest level of activity since August 2010 and dropping fast. Despite the decline in active rigs U.S. production declined only 6,000 bpd from the 35 year high of 9.192 mbpd in the prior week. Crude inventories rose 10.1 million barrels last week and the largest increase since March 2001 and the highest inventory level for late January in 8 decades. It will take 6-12 months for the impact of the rig declines to be reflected in oil production.


Green = recent highs, yellow = recent low.

Gasoline prices continue to decline with the streak currently at 119 days. Oklahoma is in the lead with gasoline prices at $1.49 at several stations. AAA reported on Saturday the national average was $2.03 and still declining. They are predicting sub $2 gasoline by the end of next week.

So far every trading day in 2015 has seen a Dow trading range of more than 200 points. This is extremely rare. Fifteen days in a row of 200 point ranges has not been seen in a long time. On analyst pointed out that even moderate orders are moving markets and nobody appears ready to take long term positions. Funds are trying to move money around but having a very hard time doing it because of the volatility. Volume is shrinking with only 6.2 billion shares on Friday. Volume has been heavy on the down days and light on the rally days. The higher we move the lighter the volume. Indecision is rampant. Conditions are setting up for another flash crash.

The Transportation Security Administration (TSA) found more than 2,200 guns in airport carry-on bags in 2014. That is 400 more than they found in 2013 and three times the number found in 2005. Over 80% of those guns were loaded. This statistic is unbelievable. Why anyone would think they could just walk on an airplane with a loaded gun in their bag after 14 years of increased airport security is unknown.

Israel released security video of new Iranian Intercontinental Ballistic Missiles capable of reaching the USA. The video shows a long-range 27 meter missile on a launch pad outside Tehran. There are U.N. sanctions against Iran to prevent them from developing long-range missiles. Apparently the sanctions are not working too well. Also, the IAEA now says Iran has enriched enough uranium to construct between 8-12 nuclear weapons within 3-6 months. More than 86% of Middle Eastern experts surveyed believe President Obama will not be able to stop Iran from constructing and testing nuclear weapons over the next 12-18 months. That is really unsettling.


Enter passively and exit aggressively!

Jim Brown

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"It is the soldier who salutes the flag,
Who serves beneath the flag,
And whose coffin is draped by the flag,
Who allows the protester to burn the flag."

Charles Province