Friday, January 23, 2009

Morning Update/ Market Thread 1/23

Good Morning,

Futures are down BIG. DOW is down more than 200, and S&P down more than 25 points and is sitting right on the 800 level.

No economic reports this morning, but the dislocation seems to have emanated in Europe were shares are diving. All triangle bottoms appear to be broken, but beware that there are often retests of important technical breaks. I think of this like the market being in disbelief and it needs to taste it to prove that it meant it! That’s how it often behaves at any rate.

Interestingly, VERY interestingly, the bond market is NOT going up with equities down big. That has got to have the administration worried, and it should have YOU worried too. That is very likely to feed on itself if people get nervous about it you will see capital fleeing America. What else are people going to do with their money? Yes, the mattress is an option, but the big money players will NOT stick around and watch their money get flushed in stocks AND in bonds. It is time to pay up the hard way America, we best be ready for that. By the way, I will note that fixed rate home loans have actually climbed by more than .5% in the past week or so. The Fed has lost control of the situation, do not buy into the BS that money is leaving bonds and going into stocks. That’s just not happening.

GOOG did well yesterday, but the gains have bled off almost entirely overnight, and this morning GE matched their earnings estimates and stood behind their dividend payments. That really pisses me off, frankly, as they turned their finance arm into a “bank” in order to exchange THEIR crap for taxpayer money. That dividend money should be going to the holders of THEIR crap first, the taxpayer. Whatever, the math is so unworkable now, we might as well just throw ourselves an endless $150 million or billion (doesn’t matter) party. Oh, and GE stock is DOWN this morning.

I am watching the Euro / Yen (EUR/JPY) cross today and notice that it is climbing off its bottom a little. That should be something to watch.

There is support immediately below here, first at 800, then at 896, then at about 789 (a pivot), 768 (a pivot), and finally at the November pin lows which are down at 741. After that, well, let’s just say that it’s not good.

There is resistance immediately above here at 804, and I would not be surprised by a run up to about 815 to taste that triangle.

If this is wave 1 of 3 just beginning, look out, it should run far and fast. Wave 1 was about 140 points and wave 3 could be more than that. If it were to equal wave 1, the break of the triangle came at about 815, so the target would be down around 675! YIKES. But don’t get too excited, we must get beneath the November pin lows, and here’s the thing. I can almost bet you that the Obama Administration will come out with some super duper sounding stick save this weekend. BE CAREFUL. If you did not catch this move short and you pile in here, you could be in for a nasty surprise. If, on the other hand, they do not act this weekend, then that target becomes very real, very quickly. Watch the bond market! Stocks cannot rally for long if bonds are falling, as that will mean higher interest rates for businesses and for everyone!

Going to be a wild day, watch and please contribute to the comments section of this thread. That's also where you will find the latest charts.

Have a good day,

Nate