Jack's Wrap - Just Another Day In The Trend...

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Stocks like Gm at a 62 year low. Price target from Deutsche Bank at $0. The Sp closes a hair below 900 and Aapl breaks down, recovers but still has another down day in its longer term down trending pattern. Yes, we did close decently above the lows for the day but YES, the market did close red. Very red. Not green. Not wonderful. Not perfect. It shocks me how folks try to spin today positive because we closed off the lows. What??? What am I missing!!! Are things so bad that a 2% loss in the major averages is a GOOD DAY???? doesn't feel like capitulation to me. I know the market could just explode higher tomorrow because this market has a tendency to do exactly what you don't think it can but how can anyone try to spin doctor this thing positive? There is no way. Sorry but no way. Ge 17's. Bidu -20. On and on we go yet some try to tell us things just aren't all that bad. Yes they are that bad folks. We could all use a rally to make us feel better about things. If you're stuck in long term plays or your 401 k's you could use a 50 day test relief rally. Remove some of the darkness. I'm all for it. However, please bring me some evidence that we are about to embark on something wonderful if you're a long suffering bull. Give me the proper hammers, etc. Give me another short term buy signal like we got just a while back where we were, overall, able to make some very good money. We hoped today might bring that signal again but the late day selling took it away. The hollow candle possibility on the Nas taken away late. So no hollow. A horrific advance decline line and an even worse advance decline volume line. Nothing that says go long, even should we wake up to plus 300 Dow futures in the morning. Yes, the 60's look alright but they have been head fakes many times in this bear so they're extremely difficult to trust. We've had stimulus after stimulus packages from all over the world and still nothing. Again, let me see another technical green light and we're in.

We have all learned by now to look for confirmation to price action. We saw today just what you're looking for if you're bearish. A poor advance decline line as I discussed but also the depth of them. 90% to 10% advance to decline volume. More than 4/1 decliners to advancers on the Nyse is certainly undeniable confirmation to price action. 3/1 on the Nas always qualifies as confirmation. Volume increased slightly over the past few days as well. Nothing big but an increase. Up days have had by far the lightest volume days. As hsa been the case for most of this bear, the internals say don't argue with price. It's the real deal. Nothing good to take from it if you're a bull. Nothing to the contrary. It's as bad as it looks.

Leaders are still not leading and even more are not and are breaking down, Bidu broke today. Aapl barely saved itself. Still was lower. Ba trying to break again and save its positive divergence. No matter what sector you look at, there are leading stocks within that sector that continue to be unable to find a sustainable bid higher. A day or two at the most but then they just give it up and start their downward journey all over again. Many are saying these stocks are too low and should be bought. No debt, etc. It's hard to argue with that  scenario except if there's just no demand for that company's product, you can make a case that they're still not too cheap. It seems corporate America has literally hit the deep recessionary brick wall. Things have stopped. Nothing is moving along. Business, housing or whatever. Nothing is humming along positive. Deflation apparently continues at very deep levels.

We have not broken any of the old lows yet and who knows, maybe we won't. You never know. 839 Sp is still a beast and any time we get near there the market does seem to find a way to move higher. 1493 is the old low on the Nas and it seems to me that this area would be the easiest to take down as the p/e's are highest here and with a failing economy, they should have no problem falling to new lows. This is not the case however. The old lows are holding even though we now have Gm and many new situations that are clearly unfavorable for the market environment. Does that mean we won't see new lows? Of course not. It may and may not but thus far the market has been able to hold off the bears from breaking it down. It doesn't mean to go buy stocks because we've held however. It means if you're bullish it gives you hope but nothing more than that. We need a lot more technical evidence before even thinking about getting aggressively long. It's best to be all cash or close to it. Nothing more than a few plays at any time. Nice and slow please. Being appropriate has been our savior throughout this bear.

Peace

Jack

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