Monday, July 06, 2009

Oil Heads to the Bottom

- Wednesday reversal continues, aided by a weak jobs report.
- Jobs disappointing as a glimmer of hope fades.
- Oil heads to the bottom of the barrel as its reversal continues as well.
- Some say this is not your father's recession. But it IS.
- Looks as if the real test is on.

Pre-window dressing trends resume.

Thursday the market continued Wednesday's intraday reversal and rollover, getting a big kick from the weaker-than-expected jobs report. Back in June we saw SP500 try to take out the January peak. Intraday it made the move and cleared that resistance, but it reversed and closed flat on the session. It was not any kind of key reversal that formed on a surge in volume with the index closing lower, but it had the same effect. SP500 rolled over and came close to getting down to the 875 support level. Wednesday, SP500 showed similar action though this was at the May peak versus the January peak. Intraday it moved higher to break that level, but then reversed and rolled over, closing basically flat; Thursday it continued that move as stocks sold off.

What is happening now is what we anticipated would occur before the window dressing that started a week ago Thursday. In other words, SP500 was selling off and was making the tests that it needs to make after a 35% run off of lows, but it was interrupted by some quarter-end window dressing. New money was put to work on Wednesday morning as the month came to a close, but now that seems all of that money is used. SP500 is heading lower to make that test of 875 and 850 (or possibly lower) that it was ready to make before the end-of-quarter action.

The jobs report triggered the action; it did not cause it. It was not nearly as terrible as earlier in the year, but it was worse than expected with over 400K jobs lost versus the 350K or so expected. Unfortunately, the move started with a gap - the jobs report put everyone in a sour mood after it was already heading downside with the rollover. That did not give us a lot to buy into, though we managed to get some RIMM shares to the downside after rebounding on the heels of some early selling. As far as the DIG, NBL, and PCU plays, they all gapped to the downside and never came back. Indeed the market never even tried to rally back on Thursday, and thus we did not want to chase anything. We could get a bounce back on Monday and that may give us some opportunity. When these kinds of moves happen one does not want to chase. Fortunately, we are already in some good plays to the downside that we have been taking over the past week, such as FAST, GENZ, SU, TEX and XTO just to name some of them. They moved quite well to the downside as did most stocks on the session.

Oil was in the tank (so to speak) as well. It closed at $66.58, down $2.73, the decline aided by a surging dollar. It rallied and closed at 1.3998 Euros, up from 1.41 the session before. When we see this kind of worry about economic recovery and when the US has poor economic results, it does impact the rest of the world. Investors then move into the dollar or US Treasuries as a safe haven. We saw bond yields crater as investors ran their way. The 2 year once again fell below 1%, closing at 0.99%. It made it up to 1.5% just three weeks ago, and now it has shaved off over 0.5% from that. The 10 year was up at 4%, and closed at 3.49%. That shows you the power of fear - when people get scared, no matter how much debt we have outstanding, and no matter how many trillions of dollars that we owe the rest of the world, they run to the US to take care of their problems. When it comes to financial situations, it is the dollar and US Treasuries that are the salve to their worries.



Intraday the market gapped lower and stayed down all day with no real attempt at a rally. Late, there was a slight bump up, but it got slapped right back down as the sellers were in firm control the entire session. Not too surprising since it was the end of the week ahead of the holiday and no one wanted to stick their neck out to the upside given the rollover and the news in the market. There is a concern that the economy is going to head lower again, and with oil tanking after hitting $73 on Monday night and then rolling over itself, there is a fear that other commodities are going to do the same thing because there is not the demand from the world economies to support higher prices. Thus oil is diving and it could - I do not like to make predictions with respect to oil - but we could see it back in the $50's this time. That would be interesting going into the middle of summer. It would be a real shot in the arm for consumers, that is for sure.


The action was very weak. Breadth was -3.8:1 on NYSE and -4.81 on NASDAQ. Volume fell further off of a cliff; it did not come close to 1B shares on the NYSE, indeed trading only 626M shares, and that is with an additional 15 minutes tacked on at the end of the day due to some technical problems that the exchange had in filling orders earlier in the session. They appended the session with 15 extra minutes but it did not help the volume. Of course it was ahead of a three-day weekend, it is in the summer, and it is right at the 4th of July. That is a notoriously low-volume period, and thus we did not see much trade, but saw a lot of price action. When there is not a lot of trade, that allows a few large institutions or large programs to push the market around, and this is what we saw on Thursday with the large losses of over 2%, and close to 3% in some circumstances.


The charts tell most of the story. We have been talking about this quite a bit over the last couple of months, that is the need for the NYSE indices, particularly SP500 to test back and backfill some of the 35% gain it had off the March low. It is abnormal for the market to continue such strong gains without a test. For the past month and a half, it has put in a lateral move, and that is very good consolidation and testing action. Given the size of the move off the low however, we still anticipated further declines to fully test the move. By "fully test," I do not mean coming all the way back to the March lows - not at all. I am speaking of more normal retracements, such as the Fibonacci 38% level, or even the 50% level that is typical when you have such strong moves off of the bottom of a selloff. That is what I am looking for here, and considering Thursday's action it looks like that could be starting. I have said that before - back in June it looked like it was starting again, and it did get underway, but liquidity interrupted it. It is now coming down from a lower peak and that likely means it is going to make that deeper test.

Speaking of those Fibonacci levels, the market could easily sell back to 875. It did not quite make it there on the June selling, but it is starting at a lower level now and it is just a short conversation away from that point. 846 on the SP500 is the 38% Fibonacci retracement level. That is also coincident with the October 2008 lows. Those are key lows - the first lows made as the market sold off. When SP500 held at those and tried to find support there, it established a nice range that later on (as in now) would maybe provide a support range as the market came back to test. I have a feeling we will find out over the next couple of weeks whether or not that is the case. That does not mean that SP500 is necessarily going to hold at those levels down near 850 or 846. The 50% level is also a normal retracement for such a move as we have seen off the March low, and that is 811 for SP500. There is still a significant amount of movement that SP500 could have. In other words, it could sell back another 85 points from the Thursday close and still be in a normal pullback to test such a strong, outsized move as we saw off of the March lows.

There is no question that NASDAQ is the market leader, but that did not prevent it from selling off on Thursday. It gapped lower as well, and on the close it is already just 10 points off of its November peak. That is the point it tested in June, broke through and fell down to the May peaks, down around 1763-1765 and held there and then bounced back up. We could easily see all of this repeat again. That is where it is going to get interesting - in that range of support from November down to the May peaks as the key support level for NASDAQ. Remember that the November peak was the first high off of the bear market low for NASDAQ, therefore it was a very important point for it to break over. Thus, that makes it a very important point for it to hold on a test. Again, this is where it gets interesting. It looks as if it could fall back into the range from the May peak on down to the January peak at 1636. That is a wide trough of support, or trading range, that can act as deeper support for NASDAQ if SP500 sells back to 811 and makes a 50% retracement of the March move. We could easily see NASDAQ making that pullback into that range from the May peak down to the January peak - that would not be out of the ordinary. If NASDAQ can hold where it held in June, i.e. at the May peaks, then that is a very strong indication that NASDAQ is going to move higher and will remain the market leader. Thus far, NASDAQ still looks quite strong even after the Thursday action.

The SOX was down 1.2%. It was a relative strength leader on Thursday and it still looks very solid, although I say solid in a relative sense. Recall that the SOX made two breakout attempts and failed them both, forming a double top and falling back into its range. Since then it has held well. For the past week it has moved laterally in a very narrow, tight range, holding above the 50 day EMA. It looks quite good, and toward the end of the week many semiconductor stocks were performing quite well. If you look across the board, you see they were flat or slightly up, even on Thursday. A classic example is Broadcom: it looks very much like SOX in its nice lateral, tight move. There is some underlying support there, and when you think back, semiconductors were one of the first sectors to move up off of the lows; it makes sense that they would hold if the market is going to continue higher. That is exactly what they are doing - when the rest of the market was getting taken out and trashed, the semiconductors looked relatively quite good even though they were down.


The relative strength leaders were the SOX and semiconductors, and they were without a doubt one of the relative strength leaders for the entire week as well. No surges, but they had good strength compared to the out-and-out selling that impacted a lot of the other sectors. For instance, energy was gutted, industrials were weak and sold off, financials tried to show a little strength early in the week - remember the window dressing that bumped them up. They were taken out and pretty much whipped like dogs after that. Agriculture was interesting because the ag stocks were up. Of course the ag stocks were taken out and beaten about the head and shoulders before everything else was, so they are pretty much sold out now. That is interesting because we saw POT jump back up off a second test of a Fibonacci level which makes it an interesting upside play at this point. We are going to look at that because we closed down our downside position with a nice gain, and what was left was taken off the table. We can now look at some ag stocks and POT as a possible upside play while everything else is taken out and beaten up as the agriculture stocks were over the past few weeks.

Large cap techs were down but not out. RIMM is struggling, and we picked up some downside positions on RIMM, but a lot of the large cap technology stocks are still holding up well. The question is how are they going to hold up over the next week or two as the market comes back and tests further. They will tell a lot of the story as to what NASDAQ is going to do, of course because the large cap techs are the primary waiting in the NASDAQ index. How they respond will tell a lot about what NASDAQ is going to do. The key point to take away on all of this is that leadership is trying to test and hold bases or breakouts as the market comes back. How they hold up if they are able to continue basing, or if they are able to come back and hold support, will again tell us a lot about what this pullback has in store for the market overall.


As jobless world grows it turns to a leading indicator.

The big issue investors dealt with to end the week was the disappointing jobs number that previously provided a glimmer of hope but then dashed them with this June report. It was not a bad report: 467K jobs lost was a lot worse than the 367K expected. In May, that was revised to 322K jobs lost versus -345K originally reported. There is some backsliding, but of course the other numbers were not any major change. While we have seen in the 600K range of losses, we are now down to 'merely' the 450K range. Weekly claims are still growing, however, and one has to reconcile that the weekly claims have started to move back up as well. This jobs report is dated information compared to those jobs reports that come out weekly. What we are seeing is backsliding there, so will likely see more deterioration in the jobs number overall.

Losses were across the board. The only thing up was education. Even government was down 52K as the census workers hired are now laid off. Unemployment hit 9.5%, which was less than the 9.6% expected though more than the prior month's 9.4%. The job pool fell over 130K, so that tells you that a lot of people just gave up looking for work. The unemployment rate would be (and is) higher if you take away the fiction of people who are not looking for work, but you know those people would take a job if it was offered to them. Nonetheless, 9.5% is still high and it hurts a lot. Indeed it is the highest since 1983. 6.5M jobs have been lost since the recession started, and there are a record 14.6M people out of work. That is the official number, but the consensus outside of the government is that there could be as many as 30M people unemployed in the United States. That is 30M people capable of working, who would work if they had a job. That is the severity of this recession.

Is the jobs report a lagging or a leading indicator? That is argued every time the jobs report comes out. I am on the side of it being a lagging indicator. There is a time when there is a crossover in whether a report is leading or lagging. With so many people out of work as we have right now and with only demand-side stimulus promulgated by the federal government, the jobs losses become a coincident indicator. Worry over jobs inhibits expenditures; in other words, the number of jobless people becomes so great that its gravitational impact (as one might say) on the rest of the economy rises as more and more people cut back on expenditures since they are worried about whether or not they are going to have their job, or they simply do not have a job and the income to make purchases. At that point, it starts to become a leading indicator because that impacts decisions by corporations and small businesses as to what they are going to do - whether or not they are going to make purchases, whether or not they are going to look to hire new people and those types of things.

At 9.5%, again the largest reading since 1983, it is getting to that level where it is starting to be The Blob that ate Cincinnati. It is going to overtake the rest of the economy unless we can do something to create jobs. It is very difficult to break the cycle if you cannot get companies to have some optimism about the future, or at least to get them to start spending money and looking to bring on people as they invest in their business. As noted, the current stimulus simply does not do that.

This recession is not different. Indeed it is depressingly familiar.

Over the past week people are stating "This is not your father's recession." Today one fellow said that this is a different recession, of a kind we are not used to. I would posit that that is EXACTLY our father's recession. The reason I say that is because I was a kid in the 70's and I lived through that recession but my father was a worker during that time. This recession that we are having is very much the same kind that we had in the 1970's. We had the oil shock, regulation, money printing that debased our currency and ignited inflation pressures. This recession has the same catalysts and responses. There was the oil shock at $140 a barrel last year. The same monetization of the oil shock and response to economic slowing has sewn the seeds of inflation. Regulation is again exploding and we have adopted a lot of governmental policies that are bent on spending versus actually encouraging economic growth.

Those are the same mistakes that made in the 1970's. From Nixon, to Ford, to Carter, it was one boondoggle after another. During the 70's the blue chip stocks - really all stocks - were losing most of their value, the economy was slack (that is the best you can say for it right now), there was high inflation, and there was high unemployment. That's what we have now and it is getting worse, heading toward the 1970's levels. On top of that, the government in the 1970's did nothing substantive, at least in terms of positive impact, to help the situation. The government was regulating and the government was spending. Regulation and spending do not - I repeat - DO NOT result in economic recovery. The result was that we had 10 hideous years until Reagan took office. Then we had a tough recession - the end of the 10-year recession - as President Reagan and Fed chairman Paul Volcker broke inflation's back. What they did was put forth the right kind of fiscal stimulus, coupled with tough monetary policy that actually raised interest rates. People thought that was crazy with the inflation and high unemployment, but Volcker raised interest rates, and combined with the Reagan stimulus helped quell inflation. It also spurred massive investment in the United States and we rode the resulting boom for the next 20-odd years until we managed to kill it off with this profligate spending once again, under Republican and Democrat administrations.

Sadly, as noted, we are doing the same thing once more. When you look at the stimulus bill, there are a lot of things that they call stimulus, such as the healthcare records and the green initiatives. However, of the $800B+ in stimulus, only a paltry $50B has actually hit the economy at this point. I believe you can go to a place called and see the results of that spending. None of that is stimulating small business or really any business to invest in themselves or in the United States. I have talked to many small businesses, and NONE of them have received any stimulus or are in any way induced to spend or invest regarding their businesses as a result of this stimulus package.

What we are getting from the stimulus are companies such as GE and its CEO Jeff Immelt coming out and buddying up with all of the administration officials about the green initiative. Wal-Mart Wednesday came out and said it really liked the proposed healthcare plan even though details are fuzzy. Why? Because it will benefit WMT. Beware when the government shows up and says "I am here to help," and you should also beware when mega corporations come out in support of massive government spending programs. They are basically governments themselves and they see this as a benefit to their bottom lines. You might think that is fine, but what benefits a few mega-corporations is not usually good for all of America. Immelt and GE see their savior as this green initiative. They feel they can take their light bulbs and other aspects of the company and use the green initiative as a massive profit center, using our tax dollars to pay for it before trying to sell the stuff back to us. Beware. Wal-Mart sees profit potential because it has its in-store clinics and it wants to latch onto the government and use that money to funnel profit into its coffers, again using our tax dollars to make money for itself.

My wife saved me money one day. She went out and bought a bunch of stuff that was 30-40% off. She spent several hundred dollars and came back telling me what a great job she had done saving me money. That is exactly what GE and Wal-Mart are promising when they stump for these massive government spending programs that do not add anything to the economy - all they do is take money from taxpayers, whether they be individuals or businesses, and allow a few big enterprises to retool their businesses.

It is a fact that large corporations are not the job creators in the United States. I have researched the issue on several different occasions, and even the Small Business Administration figures bear out, that small business creates the lion's share of jobs. It is well accepted that small businesses create 70% or more of the jobs in the country. Look where all of the jobs in technology came from in the 80's: companies like Apple, Microsoft, Cisco - those start ups that had the new and better ideas. They are the ones that created the massive job growth - the start ups, the new ideas that catch the next wave of technology or the next wave of invention. Conversely, initiating programs that tax American citizens to for initiatives that only big companies can take advantage of and use as profit centers is not going to create more jobs. It will only rescue these companies that need some form of their own government bailout. That is why they are out there so vigorously promoting these programs. Again, beware. Let your Congressmen know that that is not what you want because it is not good for the country and it is not good for you.



VIX: 27.95; +1.73
VXN: 28.07; +1.21
VXO: 27.45; +2.28

Put/Call Ratio (CBOE): 1.05; +0.25. Two out of three sessions above 1.0 on the close. Expect to see more as the selling continues. Call me when it gets to 7 or so.

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.

Bulls: 41.47%, continuing the decline. 43.6% last week, down from 44.8% as the choppy market is still culling the herd some. Hit a high of 47.7% on the run from the March lows. Steady rise from 36.0% just 10 weeks back. Has passed 43.2% hit mid-April before anticipation of stress tests. Over the 35% threshold, below which is considered bullish, but this is not a bearish indication yet. Has to get up to the 60% to 65% level to be bearish. Dramatic rise from 21.3% in November 2008, the bottom on this leg. 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: 29.9%. Bears continue their recovery after falling as the market rallied. Up from 23.3% just over a month back. Still well off the 37.2% and the 37.1% in mid-April as the rally continued higher. As with bulls, below the 35% threshold considered bullish and starting to approach bearish levels (for the overall market). Now far from off the high on this run at 47.2%. For reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: 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). That was a huge turn, unlike any seen in recent history.


Stats: -49.2 points (-2.67%) to close at 1796.52
Volume: 1.876B (-1.77%)

Up Volume: 269.717M (-1.088B)
Down Volume: 1.649B (+1.03B)

A/D and Hi/Lo: Decliners led 4.87 to 1
Previous Session: Advancers led 2.03 to 1

New Highs: 15 (-28)
New Lows: 14 (+6)





Stats: -26.91 points (-2.91%) to close at 896.42
NYSE Volume: 626.097M (-34.15%). Really, really low volume.

Up Volume: 42.701M (-555.301M)
Down Volume: 579.391M (+256.942M)

A/D and Hi/Lo: Decliners led 3.83 to 1
Previous Session: Advancers led 2.75 to 1

New Highs: 18 (-16)
New Lows: 43 (-3)




Stats: -223.32 points (-2.63%) to close at 8280.74
Volume: 157M shares Thursday versus 184M shares Wednesday.



I am painting a fairly gloomy scenario with respect to what is happening with the economy. As we know, the market is a leading indicator of the economy and right now the market has put in a good run and is trying to test back as it tries to digest the recent economic data as well as the outlook for stimulus. On the positive side - not to leave anyone down on the 4th of July weekend - the market is hardly rolling over. It is making a test that it needs to make. It has rolled over in the sense that it was unable to make the break over next resistance, but not in the sense that it has rolled over, crashed lower and broken through all of the uptrend lines and is heading back down to the March lows. Not at all - or, at least not at this point. Hey, I cannot be all flowers and roses. In any event, the SP has started to test. The last time it was saved by portfolio shuffling, but now it does not look like there is going to be much else to save it. There is still a lot of liquidity out in the market that has been working to fill in the holes on dips, but that is waning for the moment. You can see how the money is not coming in as it was up through June. The market was trying to pull back until that window dressing came along and bucked it up. It is continuing with that trend as predicted, and that is why we are taking downside positions along the way.

It looks like the test is on. The market is at an abnormal high without having a pullback. It is top-heavy, and not even the liquidity that the central banks around the world are printing up looks like it will keep it afloat in the near term. It wants to make this test, but again there is nothing nefarious about this. It is just something that the market needs to do in order to set up better. We are playing the downside with several plays that we have that are moving well. There may be more opportunity to play some downside: One thing this market does is, as soon as it makes one move, it tries to bounce back the other direction. Come next week, the market might bounce up for a couple of days before it trends lower once more. That is great if it does because there are some plays that gapped down that we were not able to get in as we wanted to avoid chasing on Thursday. If there is an opportunity to move into some of these, i.e. a relief bounce, we will gladly do that. Any upside rebound can be played to our advantage. We can take some profit or we can use that on plays that were under some pressure on Thursday - if they bounce up but cannot right the ship, we can use that to sell some of those into strength.

What should you look for as the market sells back? We have downside plays and will look for some more upside as relief bounces come in. We need to watch and see how the market tests back to those levels to begin looking for upside plays. There are some clear Fibonacci levels and support levels that are on the report, and we need to watch how these key levels hold. Key stocks are also taken into account, those stocks - such as AAPL and others - will come back if the market sells more on this test. We will look at support levels and Fibonacci retracements, but will not necessarily look at flags and that type of play that are more for trending stocks. As the market will be chopping around in its lateral consolidation, we will look for these stocks to come down to other support levels, or at the bottom of trading ranges and then to show signals that they are going to hold that level. That puts them at a good risk/reward point, and if the overall market is testing a key level and looking like it will try to make it stick, then that is a good point to move into some of these great leadership stocks that everyone seems to love to put money in for when they bounce higher.

Janice Yellen, former Federal Reserve member, said Wednesday that the Fed is not going to remove any of its monetary stimulus, in other words is not going to raise interest rates for a long time - indeed years according to Ms. Yellen. If that is the case, then we can be pretty sure that the liquidity is going to stay there. What can change that would be some very negative economic data. That could upset even the monetary stimulus - the money printing that continues right now. That helped buoy the market, but even with that "stimulus," if the economic data turns sharply negative again, then that money is not going to be able to hold the market up and that could be the catalyst that would send the indices back down to the March lows. Right now that is not happening. Thus far liquidity has been able to fill in all of the holes in the market, and now it is going to make a test after moving laterally for a couple of months. It looks like the indices are going to come back and make that test, so we will look for the stocks to hold support and hold logical levels like Fibonaccis or other support and if we see bottoming signs, we can move in on those.

Basically it is the same game we always play. We are looking for opportunity as the market makes its moves. We are in some downside plays now and still have some upside - if those hold on, that is great. If they do not, we will close them out. Then, as the market makes another bottom or another low and makes a key test, we can use that opportunity to move in and see if we can mine some good upside moves. We will have the aid of seeing whether or not some good patterns have formed, whether or not they are ascending triangles, cup with handles, double bottoms, or the ABCD patterns that we like. We will see what forms up and will take advantage of what it does. The point of all of this is that while the market is selling back, right now this is nothing that is inherently bad. This is something that is indeed normal and something we anticipated would happen as you are well aware. What we do is take advantage of what the market gives us, and when it makes that pullback we will be ready to move in with great stocks as good risk/reward points. If a play does not work, that is fine. We will lose a little bit on the plays, but not much, and will then look for the next opportunity when the move does stick and we make a lot of money on those plays. Have a great weekend and a happy 4th of July. See you next week.

Support and Resistance

NASDAQ: Closed at 1796.52
The 18 day EMA at 1815
1880 is the June peak
1897 is the October post gap intraday high.
1947 is the October gap down point
1984 from late September
2099 is the mid-September low
2169 is the March 2008 double bottom low

1786 is the November intraday high
1780 is the November 2008 closing peak
1773 is the May intraday peak
1770 is the mid-October interim peak
The 50 day EMA at 1761
1716 is the May closing high
1673 is the prior April peak
1666 is the intraday January 2009 peak
1664 is the May 2008 low
1661 is the April 2009 prior peak
The January closing peak at 1653 (intraday)
The 200 day SMA at 1637
1623 is the early April peak
1620 from the early 2001 low
1603 is the December peak
1598 is the February 2009 peak, the last peak NASDAQ made
1587 is the March 2009 high is getting put to bed again
1569 is the late January 2009 peak
1542 is the early October 2008 low
1536 is the late November 2008 peak
1521 is the late 2002 peak following the bounce off the bear market low
1505 is the late October 2008 closing low.
1493 is the October 2008 low & late December 2008 consolidation low

S&P 500: Closed at 896.42
899 is the early October closing low
The 50 day EMA at 902
The 10 day EMA at 914
919 is the early December peak is bending
930 is the May peak
935 is the January closing high
944 is the January 2009 high
956 is the June intraday peak

896 is the late November 2008 peak
The 200 day SMA at 888
888.70 is the April intraday high.
882 is the early May low
878 is the late January 2009 peak
The prior April peak at 876
866 is the second October 2008 low
857 is the December consolidation low; cracking but not broken
853 is the July 2002 low
848 is the October 2008 closing low
846 is the April peak
842 is the early April peak
839 is the early October 2008 low
833 is the March 2009 peak
818 is the early November 2008 low
815 is the early December 2008 low
805 is the low on the January 2009 selloff. KEY Level
800 is the March 2003 post bottom low

Dow: Closed at 8280.74
8307 is the April 2009 intraday high
8315 is the February 2009 peak
8375 is the late January 2009 interim peak
The 50 day EMA at 8390
8419 is the late December closing low in that consolidation
8451 is the early October closing low
8521 is an interim high in March 2003 after the March 2003 low
8588 is the May high
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
9387 is the mid-October peak
9625 is the October closing high

8221 is the May 2008 low
8197 was the second October 2008 low
8191 is the prior April peak
8175 is the October 2008 closing low. Key level to watch.
8141 is the early December low
The early April intraday peak at 8113
The early April peak at 8076
7965 is the mid-November 2008 interim intraday low.
7932 is the March 2009 peak
7909 is the early January low
7882 is the early October 2008 intraday low. Key level to watch.
7867 is the early February low
7702 is the July 2002 low
7694 is the February intraday low
7552 is the November closing low. KEY Level.

Economic Calendar

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

July 02 - Thursday
Nonfarm Payrolls, June (8:30): -467K actual versus -367K expected, -322K prior (revised from -345K)
Unemployment Rate, June (08:30): 9.5% actual versus 9.6% expected, 9.4% prior
Hourly Earnings, June (8:30): 0.0% actual versus 0.1% expected, 0.1% prior
Average Workweek, June (8:30): 33.0 actual versus 33.1 expected, 33.1 prior
Initial Claims, 06/27 (8:30): 614K actual versus 615K expected, 630K prior (revised from 627K)
Factory Orders, May (10:00): 1.2% actual versus 0.9% expected, 0.5% prior (revised from 0.7%)

July 06 - Tuesday
ISM Services, June (10:00): 46.0 expected, 44.0 prior

July 08 - Thursday
Crude Inventories, 07/03 (10:30): -3.66M prior
Consumer Credit, May (15:00): -$7.5B expected, -$15.7B prior

July 09 - Friday
Initial Claims, 07/04 (08:30)
Wholesale Inventories, May (10:00): -1.0% expected, -1.4% prior

Jul 10 - Saturday
Export Prices ex-ag., June (08:30): 0.3% prior
Import Prices ex-oil, June (08:30): 0.2% prior
Trade Balance, May (08:30): -$30.0B expected, -$29.2B prior
Michigan Sentiment-Prelim, July (09:55): 71.0 expected, 70.8 prior

By: Jon Johnson, Editor
Copyright 2009 | All Rights Reserved

Jon Johnson is the Editor of The Daily at

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