Weekend Analysis for Fri December 26th 2008

Today was another boring and uneventful day in the markets. It was also another day trading below the 50's after losing it. Not good because the longer you trade below lost support the better the odds are that the selling will continue in the near term. Never a guarantee but the action is bad when you think about how little volume there was in this normally bullish retail week. It should have been easy for the bulls to get a small holiday rally going. They simply could not. Just no buyers. The sellers gave the bulls the all clear sign but there no bulls around to jump on the opportunity. Poor action continue overall.

The one thing the bulls can take from any near term selling to come will be the great divergences that set up on the daily charts. It means we'll probably hold the 775 area on any move lower. A rally from there would be telling about whether we'll lose 775 for good in time. That's just too far out there right now to worry about so let's keep our focus on the very near term. If the Macd's don't impulse up on the rally that'll tell me that the markets are getting ready for a much larger move lower in the months ahead.  A move well below 775 tells me that the market is setting up for a longer term secular bear. We'll need to prepare for that should the message be flashed but let's deal with things one day at a time. Just something to tuck underneath the bill of your cap for future reference.

The volume will be coming back in next week and really coming back in after the first of January. The market will let us know at that point in time what its very near term intentions are. Volume talks. I worry for the bullish case because of the lack of buying volume in this retail week. Maybe we'll be pleasantly surprised. Who knows but it is making me a bit nervous to say the least. The charts can tell you more about that when you study them tonight. They are already flashing some signals that don't look too great. Need to see those Macd's cross negative, especially on individual stock plays before giving up hope for the very near term. We'll know more soon. You all received my 2008-2009 report today. read it again if need be. Always slow and easy in this type of market and remember, less is more here until things get clearer.

Peace

Jack