Sunday, February 22, 2009

SP500 Tests the Bear Lows

- SP500 tests the bear lows, market rebounds on Administration comments preferring a private system.
- CPI bucks PPI, remains under control.
- Maybe this is just a quiet bottom
- Greenspan, the Jimmy Carter of monetary policy.
- China and the US: Two different approaches to stimulus is no surprise, but the method of each is.
- Contract law no longer sacred in US? Neither will be the US economy.
- Sword of Damocles (the government) hangs over the market.

More selling, but a test of the SP500 low holds with a government assist.

Two positive opens and crap outs Tuesday and Wednesday, two downside opens Thursday and Friday, and finally the SP500 tested the November closing low. All week there were reasons aplenty for the weakness just as there have been for the past 6 months. The CPI was rather neutral after the hotter PPI, and that was almost a positive. On the other hand, Senator Dodd, Senator Hutchison and Alan Greenspan, the latter having virtually eviscerated any credibility he had, came out and in different ways said bank nationalization was likely a good thing. Earnings provided no relief as LOW missed and guided lower while JCP beat . . . but guided lower. Jumbo loan defaults, those of the wealthier citizens are surging. On top of that you had expiration. Another veritable witch's brew.

The morning started lower, but it was not a breakneck downside capitulation. There was plenty of gloom but it was as if coated with molasses. Indeed stocks bounced off the lower open and NASDAQ turned marginally positive. Then the Dodd comments piled on top of the Greenspan comments and the gains, the few there were on NASDAQ, were spilled. For the second time during this bear market SP500 undercut the 2002 bear market lows. It went further, moving toward the November 2008 closing low.

Just after 2:00ET, however, the Administration, almost two weeks after the Geithner gaffe with his announcement of the lack of a bank plan, finally said something about the banks. An announcement of a plan? Hardly. It simply responded to the Dodd et al comments about nationalization, with the White House press secretary and later a Treasury spokesman saying it was best for the banking system to remain private and in private hands.

The market, so starved for anything to hang onto with respect to the financial sector, surged on the news. That took SP500 right off the November closing low with a nice rebound. It took NASDAQ and its progeny positive. SP500 came within a point of positive, flirting with a reversal. It couldn't hold. NASDAQ couldn't hold. The Dow was not close. Only SOX and NASDAQ 100 managed an ever so modest gain.

A reversal of the SP500's November lows? Not likely. Yes it was a great bounce off of that level, but it was an expiration Friday and volatility is the norm. The 'private banks' statements triggered a rebound. It could very well hold on through the start of the week if the Obama administration is watching and has any snap and follows up with some positive statements about the importance of private banking and, dare we think it, a plan that allows banks and the market to work things out with a government assist? That would be the trigger that launches a strong oversold rally.

As it is, nothing has really changed yet as very anxious and indeed frightened investors await something positive from the Administration that has thus far been extremely negative. Congress is no better. Everyone is tired of the blame game, i.e. the worn out presage to any comment on the economy that the current situation was inherited. With the passage of this massive FDR spending bill, the President now owns this mess. Everyone knew it was bad, the President as well as our Congressmen who all sought our vote for their jobs. They are there and we are waiting for some leadership, not excuses.

TECHNICAL. Intraday it was somewhat typical expiration. Lower start, recovery attempt, then a rollover to new session lows. An afternoon rebound to session highs, a fade to the close but still a close in the upper half of the range.

INTERNALS. Volume surged but it was expiration and that goes with the territory so you cannot claim reversal quality volume. So how about breadth? -3:1 on NYSE even with the reversal. All the NYSE indices were down close to 1% or more and thus breadth was going to be negative with the small and mid-caps far outnumbering other stocks. Indeed that is even more so now given that many so-called large caps are now mid-caps. New lows was the indicator to watch with SP500 testing its low and the SP600 was not that far off the same level. NYSE lows hit anywhere from 360 to 555 to 667 depending upon the service you look at; some serious discrepancy in the data. Nonetheless, it was much less than the 1100 to 1684 (again depending upon the data source) when SP500 was at this level in November when it put in that bear market low. Fewer new lows is an indication of more strength on the test and an indication the consolidation is still holding.

CHARTS. SP500, formerly known as the large cap index, tested the November closing low and rebounded. Financials were its bane again, but when the Administration came out of hiding and out from behind the cycle and hammer and admitted private banks were actually good for the US the financials recovered and thus SP500. Whatever the cause it was a bounce off the old low. Shorts are careful here given the selloff, the test of the old low, and the potential for positive announcements such as Friday. No doubt this was not a reversal on Friday; it was expiration and that accounted for the volume. Could this be a quiet bottom for SP500? No massive volume on this selling, lots of apathy on the way down as many investors are out of the market given the crash and then the 4.5 month lateral move. The market can scare you out, grind you out, or both. This one scared the many into soiling their trading garments and has since quietly worked sideways moving up and down, looking better then worse. The news remains bad and quite scary with the banks in liquidation mode and gloom without positive leadership from DC as the market made the last dip to the November low the past week. With a solid 12 week spread between the November and Friday test, there is plenty of base in place for a double bottom. The market will need a signal that there is a reason to rally in order to set the base bottom, however. The key is the financial system, and that means the plan for the bank bailout is the absolute key for the market. No pressure Washington. Lacking that it is still in position for a heck of an oversold rally.

NASDAQ undercut the January low but then recovered it on the close by a small cap tech or two. It held easily above the December low and it remains in great shape compared to the NYSE indices, particularly if SP500 can find reason to bounce. SOX held the January low itself, rebounding modestly off the bottom of its 10 week trading range. SP600 showed a nice tight doji after testing toward the November low on its Friday low. Pretty sharp selling last week and as with the other indices it is in position for at least a relief move. DJ30 sold lower and recovered to cut 115 points off the low. Led lower and now we see what kind of pop it has if the indices can put together a ripening oversold bounce.

LEADERSHIP. It was a tough week for leadership. The large cap techs took hits and gapped NASDAQ out of a promising higher low. As noted above, down but not out. The chips were tossed out of a good pattern as well but many are finding support at the bottom of the range. Energy was hit as well, but many found support at the bottom of their ranges as well. Steel and other non-precious metals suffered the same fate. Small under the radar issues were some of the best leaders but there were not many. China looks promising. Damage was done and it hurt us, but it was not irreparable.

SUMMARY. SP500 made the test that looked foregone after it broke the January low and DJ30 already hit its low. It tested and gave us a hit on the SPY puts and it and the NASDAQ indices that tested higher support recovered. As of yet there is nothing to turn that market as the credit markets remain tighter still as the stimulus and non-plan for the bank bailout part 2 sapped confidence in the Administration's and Congress' ability to deal with the crisis. Thus a longer term bottom has to prove itself. Until it does that and whether it does or not, the indices are ready for a bounce. If they cannot bounce from this level and breaks them the market has much more serious issues and heads lower.


CPI is tame, PPI was not, gold hits $1000.

At 0.3% CPI was in line and flat year over year. The core rose 0.2% putting it at 1.7% for the year. Not great, not bad, well within the Fed's target range. Gee, glad to see that. It should be given many worry about deflation, even some FOMC members when they mentioned the 'D' word at the last FOMC meeting versus the 'lower inflation than desired' BS we usually hear.

Food was up 0.1%, housing was flat, vehicles rose 0.3%, energy jumped 1.7%, and gasoline 6%. More of the same.

Tame inflation? PPI spiked unexpectedly but the raw and intermediate goods were well under control. Seems inflation is under control. Why is gold at $1000 then? It could be that all of the money printing around the world is getting factored into gold as inflation. It could also be that there is just a whole lot of fear in the world that the major economies are not going to make it, the currencies are going way down in value, and that major structural change is ahead.

Right now gold if the beneficiary of both. There are widely divergent schools of thought as to what will happen to the world economies. It ranges from world depression to just another crisis we confront and move on with little overall change. We have little experience with these types of major, entrenched problems that developed over 20 years of propping up markets much as the Army Corps of Engineers tries to levee and dam major waterways. At some point the perfect storm hits and the tide cannot be contained. The problem with the current storm is everyone knows there is a storm but the understanding of the problems that led to it is not totally known (credit default swaps and their extent, for example) and thus the responses are insufficient, inappropriate, and delays.

Thus you see gold spiking not just for one reason, but for many reasons as buyers with different schools of thought conclude it is the way to go. It is in all cases somewhat an answer to an unknown set of questions or outcomes. You also see the dollar stronger despite gold moving higher. They usually move in opposite directions if there is inflation afoot, but the dollar is rallying even as gold rallies. Foreigners, compared to other currencies, would prefer to hold dollars right now for safety reasons. Again, different buyers from gold and for different reasons as well. Same with US Treasuries. Despite the fear regarding the US, the fear regarding the rest of the world is worse. Bond yields rose for a short while as the stimulus and bank bailout 2 were being formulated. Once they moved from conjecture to actual plans (well, at least for stimulus at least; the bank bailout must exist only in the mind of Mr. Geithner) bond yields fell as investors rushed back to bonds when they realized the US had missed the boat and reverted to Depression era spending.

Greenspan and Jimmy Carter. Brothers in buffoonery.

There should be an 'old public servants home' where former high ranking government officials have to go and spout their inane views. I remember the Carter years and how terrible they were from a standpoint of lack of leadership, competence, economic understanding. The US lost military power, economic power, prestige, influence, jobs, self worth. Bungled economic policies, bungled foreign policy, bungled military operations, cardigan sweaters.

It is always puzzling to me how someone who was so pathetic at managing the affairs of the country, so much so we were called 'the failed experiment during his one term,' and who has such an obvious disdain for the US based upon his statements since leaving office, is given so much credence. He was a failed President that set the US years back in our economic and technological progress. His actions since undermine every administration as he tries to meddle in affairs of state and promote the failed policies of his administration. He goes to Cuba, views a hospital and business that are the only showcase facilities in the country, has a mojito with Castro, and parrots a bunch of anti-American propaganda on cue. Yes I have a hard spot in my heart for Carter. He was President when I was growing up and I saw what his policies did to my father's hard work.

Then we have Mr. Greenspan, the 'maestro' Fed chairman during the salad days of the Clinton years. Got a problem? Cut rates. Things get successful? Better drain the money supply to prevent inflation. Those were his two plays in the game book. The rest of the time he talked and said nothing with the infamous Green-speak. Because of the success of the financial markets during his tenure (other than Black Friday where as his first duty as chairman he jacked up interest rates until the stock market seized up), he was accorded deity status in monetary policy circles. He would go to Congress, engage in puffery, smile coyly as one with far greater knowledge than the subjects addressing him (and sadly, that was true), and admit he was being obtuse because that was his job.

The first hint of trouble was after the 2000 crash when he and the Fed asked for submission of empirical data regarding the wealth effect to determine if there really was one. That was one of the main reasons for his desire to drain the money supply to prevent inflation, yet they were not sure it was really true or not. Trillions lost on a hunch. Market traders exercise stricter rules of the game than that or they don't survive. And this guy was in charge of our banking system? Cracks in the armor.

Over the past year you wonder if senility has set in on top of general lack of understanding. You recall Greenspan's testimony before Congress in the fall where he abdicated and otherwise abandoned the free market ideals he supposedly held, saying he was shocked that the market failed to check itself. The market always overshoots for one, and for another he completely left out one of his premises as Chairman that he reminded Congress of during every trip to the Hill: government interference sets up imbalances that cause the markets to act abnormally. Did those brain cells holding that information die? What the markets did was swing the pendulum in the other direction when the props place by the government that built up all of these bad loans (and Greenspan's abnormally low rates for an abnormally long time), and it always swings harder. He forgot the government forced lenders to make these bad loans. How can the free market work as a check or balance when the government mandates otherwise? When the dam broke, it broke. The time for the markets to work was past because the government forced money where it should not have gone.

Then on Friday Greenspan joins the chorus of socialists talking nationalizing the banking system, saying it may be necessary to temporarily nationalize banks to help stabilize the financial markets. So much for comrade Greenspan's market based approach to resolving issues. I suppose when you forget the reason all of these mortgages were made and blame the market for it, it becomes an easy step to say the government needs to go ahead and just take over. Oh yes, and as we know, temporary in government parlance means forever.

China becomes the leading world economy?

What are we seeing right now in the world? What swings are taking place that show structural change and a realignment of economic power? The clearest is frighteningly clear. Communist China is moving to capitalism and free enterprise while the US, the bastion of free enterprise, is moving socialist.

Never happen, right? Just look at the two massive stimulus packages each put into play and you will see the difference. China acted faster than the US. Its package was put in play in 2008. We have tarried in getting it passed and then only 25% of the package hits the economy in the first year. China's package was in the $500B to $600B range. Compared to the size of its economy versus the US economy and the severed issues we are facing, ours is a comparatively small. The lack of size is exacerbated by the package being a lot of spending that even Keynesian zealots admit is not in any way stimulus. When talking stimulus, size matters.

The last point touched upon another key difference. The Chinese package is spending no doubt about it, but it is closer to the US WWII type of spending and good old US tax incentive stimulus of the past with money given to work on projects that will work on the future of the economy and create better jobs down the road. Given China's form of government it cannot be a purely effective stimulus as the investment incentives, but it works for them because their economy is not at the level of development of the US economy.

China needs the damns, roads, bridges electrical systems, water systems, sewer systems, etc. in order to achieve its industrial development. We are well beyond that point of development. We don't need to build museums, conduct bee research, put in Vegas neon signs, Frisbee parks, enhance Amtrak subsidies, further endow the Arts, fund ACORN, and provide digital box conversion coupons to fix our economy. We are beyond the infrastructure building point (and as noted, much of it has nothing to do with infrastructure anyway). Keep it maintained, yes. Improve the grid, yes. Those are worthy. Most of the money does not go to those, however, and when it does it is doled out in inefficient ways such as giving Milwaukee tens of millions to build new school buildings when, due to falling attendance and population levels, it already has 13 vacant school buildings.

We need money invested in new companies, to develop new technologies, the next ones the world needs such as new propulsion for vehicle fleets. The jobs that spring from those investments, just as with the personal computer era that started in the 1980's, are the jobs that raise our standard of living. When we invest this way we build toward the future and not just run on a treadmill, spending money on projects that, when completed, don't add to our job producing capability.

The two approaches to stimulus show the changes in each system. We have forgotten our roots as populist rhetoric holds sway during crisis times. Thus we watch idly as our freedoms are eroded and our money is spent in Depression Era ways that prolonged the Great Depression by 7 years according to most research. Comforting. We also hear how the government will cede the rights it has taken using our tax money once the crisis is over. That has not happened in the history of the US or for that matter any government in the world. Just as we were told that the sixteenth Amendment would never impact anyone in the country other than the ultra wealthy, the promises that the government will give up what is taken is false. Clinton's tax hikes brought in vastly more money than was needed thanks to the explosive economic growth, yet did the government give the extra back to us? No, it spent it.

What about contract law? The rule of law is what has always made the US the recipient of investment money from all over the world. The government is now proposing rewriting mortgage contracts by the millions, but only for those that are in distress. Paid for gratis those who are not in distress. The government will step in and change the terms for the 'benefit of us all.' Compensation contracts are getting rewritten by the government as well. The camel's nose is under the tent and if we sit by and watch it will not stop there. The market knows this and that is why the threat of bank nationalization, even though it is said to be only temporary, sends bank stocks to liquidation levels in terms of their stock prices.

This change is fundamental and if not checked by some sort of populist, taxpayer revolt our two economies will move in opposite directions and a power shift will occur as China rides its industrial and technical revolution higher while we ride our social and governmental shift lower. Those who laugh and say China will never hold to the course are wrong. Too many people getting the taste of economic freedom will ultimately lead to the amelioration of communist control. We need to wake up.



As discussed Thursday, there is a sense of fate among investors that there is nothing that they can do nor the government. As noted above, that apathy on this slide to the SP500 November lows is how some bottoms in past bears have formed. When no one cares or is so beaten up they have nothing left, the market puts in a bottom when no one is looking. Could happen here, but the market has to anticipate the credit problems will be rectified. The credit markets have locked up again after the stimulus plan firmed up and with the lack of any plan for the financial system.

VIX: 49.3; +2.22
VXN: 47.18; +1.98
VXO: 49.4; +1.61

Put/Call Ratio (CBOE): 1.06; -0.08. Four sessions above 1.0 on the close and the aggregate of all options exchanges closed over 1.0 as well. Definitely a lot of downside betting even as SP500 hits the prior low and holds.

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market doesn't have the cash to drive it higher.

This is a historical milestone in the making. Bulls are impressively low considering we are in general a very optimistic country. The few bulls is a positive indication because it means most everyone that is getting out is out and there is money on the sidelines. In other words the ammunition boxes are full and as the market recovers investors will start opening up the boxes and firing. Little by little they will be forced to put more money into the market and there will be some rushes higher in fear they are missing the train. You relish times when sentiment is so negative because it means some tremendous buys are setting up. This could indeed be the opportunity of a lifetime, and you take advantage of it by buying quality stocks and letting them work for you as long as they will. If we can hold them for years, great.

Bulls: 31.1%. Quite the dive from 35.2% it recovered to on the market rebound. Well down from 43.0%, the current top of the recovery as the market rallied off the November low. A rise from 25.3% in December and quickly starting to fall once the market encountered the January selling. Above 35% does not mean the action is now bearish. That level is up at 55%. Bullishness bottomed on this leg lower at 21.3% in November 2008. This last leg down showed us the largest single week drop we have ever seen, falling from 33.7% to 25.3%. Hit 40.7% on the high during the rally off the July 2008 lows. 30.9% was the March low. In March the indicator did its job with the dive below 35% and the crossover with the bears. A move into the lower 40's is a decline of significance. A move to 35% is a bullish indicator. This is smashing that. For reference it bottomed in the summer 2006, the last major round of selling ahead of this 2007 top, near 36%, and 35% is considered bullish.

Bears: 41.1%. Spiking from two weeks at 36.3%. Jumping over 38.0%, the recent peak over the past month as bearishness rose again. Hit the 34's on the lows, falling from 38.5% and 46.2% in mid-December. Still above the 35% level considered bullish for stocks, but as with bulls, still well below the level considered bearish for stocks. Bearishness hit a 5 year high at 54.4% the last week of October. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment on this move. 35% is the level that historically indicates excessive pessimism. As with the bulls the jump in bears did its job after hitting 44.7% in the third week of March. Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). This is a huge turn, unlike any seen in recent history.


Stats: -1.59 points (-0.11%) to close at 1441.23
Volume: 2.564B (+25.99%)

Up Volume: 1.443B (+1.067B)
Down Volume: 1.099B (-523.839M)

A/D and Hi/Lo: Decliners led 2.54 to 1
Previous Session: Decliners led 1.98 to 1

New Highs: 10 (+4)
New Lows: 437 (+162)


NASDAQ held over the December low at 1400 and rebounded to hold the January lows (1434). It has put itself in position to hold and bounce off these lows in its 10 week range. Of course has to be viewed as an oversold bounce at this point.

SOX (+0.31%) held the January low and bounced for modest gain. Tough week for the chips as some solid patterns were sent lower but as with the SOX, they held some support and are in position for a short term bounce.




Stats: -8.89 points (-1.14%) to close at 770.05
NYSE Volume: 2.117B (+42.54%). Big expiration volume.

Up Volume: 511.54M (+125.203M)
Down Volume: 1.598B (+525.108M)

A/D and Hi/Lo: Decliners led 3.07 to 1
Previous Session: Decliners led 2.65 to 1

New Highs: 11 (+7)
New Lows: 360 (+63). Or 555, or 667. Whichever one it is still well, well below the prior November lows.


Reached to the November closing low (752) and rebounded to cut roughly two-thirds of the losses. Financials were distributing then the Administrations statements reversed them. Good place for a bounce up to test 800 to 804 as the first resistance.

SP600 (-1.02%) reached toward its November closing low but did not really threaten it. when the market turned, it turned as well and closed at the upper end of its session range. Doji with tail over the prior lows and after this kind of selloff from near 250 down to 213 the past two weeks it is ready to try a bounce.


The Dow undercut its November low (7449) on the week and then managed to rebound off that low. Still could not recover the November low and still looks extremely ill. It can bounce with the rest of the market to test the November lows from the downside then what it does from there looks like more downside unless the other indices can generate something positive.

Stats: -100.28 points (-1.34%) to close at 7365.67
Volume: 584M shares Friday versus 301M shares Thursday. Expiration trade.



The technical picture is interesting for SP500 and NASDAQ with both bouncing off an important support level on Friday after a tough downside week. Interesting, but it is overshadowed by the next to be announced governmental bailout, particularly the one regarding the banking system. Without some clarity on that the market cannot price in a recovery, just more liquidation values for financials. More than that, without a plan it thinks has a chance of working to resolve the problem, the market cannot price in a recovery. Remember, fixing the credit markets does not solve the economic problems that have developed, it just allows the system to function again.

It has been almost six months, a half year, since the credit markets imploded. To this date they are not fixed. Credit markets are improved from total lockdown but they have not returned to levels that promote unfettered, confident funds transfer and credit acceptance. Over the past three weeks the improvement stalled as the world markets lost confidence in government's ability to resolve the problem.

During this time a lot of economic damage occurred. The world economies are still in impressively hard decline due in large part to a lack of flowing funds at reasonable rates in order to conduct the world's business. The damage continues to accrue as the credit markets continue their cryogenic state.

Thus when Rick Santelli, voicing the frustration of the Chicago floor traders, asked the President if he heard how his latest proposal was received, it was picked up all across the nation. IBD reports protests are arising across the country as citizens are tire of profligate spending and the Chicago-style machine methodology in which the spending bill was crammed down on the country without even being read.

At this juncture the government is not listening. Administration spin doctors were out belittling the protests and commentary, saying they won't be so upset when they need a job. How callous and crass, but how typical. Washington doesn't get it yet again. Citizens view this kind of spending and attitude as CAUSING the problem, not fixing it. If you tax and spend more and more of the small and medium sized businesses profits that pay the vast majority of the taxes, you jeopardize the very businesses you rely on for the tax money and you will ultimately get less tax revenue to spend.

So we wait for the next pronouncement, knowing that the new Administration is on an ideological course when it comes to government action and presence in our lives. It is sadly very likely that we will have to go through the 1970's-like angst of watching these kinds of programs fail before we remember that, oh yes, this kind of government intervention and tinkering with social processes and markets doesn't solve our economic problems but simply exacerbates the existing ones and creates others as well. A sad prospect, and that is why some are predicting Dow 6000, maybe 4500.

More to the current situation, however, is what happens off of this Friday test of the November lows. The indices are primed for an oversold bounce from this level and we will look at one to play some new positions to the upside as well as let some current positions hit in last week's selling recover as far as they will. The spring is wound pretty tight, and when it goes we could be a hell of an upside bear market rally that may or may not be something more. At this point the market is weak from the uncertainty regarding the bank plan or lack thereof, but it is poised to bounce if a decent one comes down the pipe. That would be the trigger to the oversold rally and we just see how strong it is and what it does at resistance to determine the next leg and appropriate action on our part.

Bear in mind that, despite the down Friday and the corresponding gloom surrounding a bad week for the market, that all of the indices are in their 4.5 month consolidation from the October lows except DJ30. SP500 held the bottom of its range Friday with the NASDAQ related indices well above their bear market lows. Overall the consolidation holds. Thus despite the gloom that even we were feeling on Friday after a tough week you don't want to lose sight of the fact that the consolidation continues. It does, however, need some help in the form of some better policies that are viewed as helping resolve the problems unlike the first attempts of the new Administration.

Support and Resistance

NASDAQ: Closed at 1441.23
1460 is the February low
The 10 day EMA at 1490
1493 is the October 2008 low & late December 2008 consolidation low.
1521 is the late 2002 peak following the bounce off the bear market low
The 50 day SMA at 1533
1536 is the late November 2008 peak
The 50 day EMA at 1541
1542 is the early October 2008 low
The 90 day SMA at 1555
1565 is the second low in October 2008
1569 is the late January 2009 peak
1603 is the December peak
1620 from the early 2001 low
1644 from August 2003
1666 is the January 2009 peak
1752 from 2004
1782 from August 2004
1786 is the November 2008 high. Key level.

1434 is the January low (1440.86 closing)
1428 is the November 2008 low, the bear market low
1398 is the early December 2008 low
1387 is the 2001 low
1295 is the November 2008 low

S&P 500: Closed at 770.05
800 is the March 2003 post bottom low
804 is the low on the January 2009 selloff
The 10 day EMA at 807
812 is the February low
815 is the early December 2008 low
818 is the early November 2008 low
The 18 day EMA at 821
839 is the early October 2008 low
848 is the October 2008 closing low
853 is the July 2002 low
857 is the December consolidation low
The 50 day EMA at 857
866 is the second October 2008 low
878 is the late January 2009 peak
The 90 day SMA at 878
889 is an interim 2002 peak
896 is the late November 2008 peak
899 is the early October closing low
919 is the early December peak
944 is the January 2009 high

768 is the 2002 bear market low
752 is the November 2008 closing low
741 is the November 2008 intraday low

Dow: Closed at 7365.67
7449 is the November 2008 low
7524 is the March 2002 low to test the move off the October 2002 low
7694 is the February intraday low
7702 is the July 2002 low
The 10 day EMA at 7713
7867 is the early February low
7882 is the early October 2008 intraday low. Key level to watch.
7909 is the early January low
7965 is the mid-November 2008 interim intraday low.
8141 is the early December low
8175 is the October 2008 closing low. Key level to watch.
8197 was the second October 2008 low
The 50 day EMA at 8252
The 50 day SMA at 8321
8419 is the late December closing low in that consolidation
8451 is the early October closing low
The 90 day SMA at 8495
8521 is an interim high in March 2003 after the March 2003 low
8626 from December 2002
8829 is the late November 2008 peak
8934 is the December closing high
8985 is the closing low in the mid-2003 consolidation
9088 is the January 2009 peak
9200 is the July peak in the 2003 consolidation
9323 From June 2003 peak
9575 from September 2003, May 2001
9654 is the November 2008 peak

7282 is the October 2002 low, the low of the prior bear market.
7008 from February 1997 closing peak
6489 from December 1996 closing peak

Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.

February 24 - Tuesday
Case/Schiller Home Price Index, December (9:00): -18.25% expected, -18.18% prior
Consumer confidence, February (10:00): 36.0 expected, 37.7 prior
Bernanke Monetary Policy Report (10:00)

February 25 - Wednesday
Existing home sales, January (10:00): 4.81M expected, 4.74M prior
Crude inventories (10:35): -138K prior

February 26 - Thursday
Durable Goods Orders January (8:30): -2.3% expected, -2.6% prior
Durables ex-Transportation, January (8:30): -2.0% expected, -3.6% prior
Initial jobless claims (8:30): 627K prior
New home sales, January (10:00): 329K expected, 331K prior

February 27 - Friday
Preliminary GDP Q4 (8:30): -5.4% expected, -3.8% prior
GDP Chain deflator, Q4 (8:30): -0.1% expected, -0.1% prior
Chicago PMI, February (9:45): 34.0 expected, 33.3 prior
Michigan sentiment, revised February (10:00): 56.5 expected, 56.2 prior

By: Jon Johnson, Editor
Copyright 2008 | All Rights Reserved

Jon Johnson is the Editor of The Daily at

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