THE CLOSE

Markets closed at/near the lows in what maybe can be called a rough week for market bulls. And for all the blah blah blah about the safe haven in big cap tech, check these 3 day results:

AAPL -9.1%

BIDU-7.4%

GOOG -5%

RIMM-9%

MSFT -3.4%

INTC-15%

HPQ -7%

Major indexes:

DJIA-3.5%

SPX-3.9%

RUT-5.8%

MID-4.7%

NAZ-5.6%

NDX-5.8%

RLX-7.6%

XAL-8.5%

SMH -10%

HGX-11%

TRIN at 4.26 and extremely overbought with a 5 SMA at 2.51 and a 10 SMA at 1.84. Those levels last seen in the middle of last March.

Anyhow, we are on the verge of the 10% correction yet again and maybe next week will be better. We certainly are very oversold and due for a big rally.

Final prediction, New York Giants lose convincingly this weekend.

TRADING UGLY

The pain continue into the afternoon as the markets are again near their lows of the year. The DJIA -200, NAZ -71 and SPX -25.5.

Sector strength- utils-

Sector weakness- homies, semis, retail, tech, airlines and real estate;

Key stocks- 4 up and 36 down- leaders- WYNN KO MO PG- losers- NVDA INTC RIMM MGM MA UA AMZN MER KLAC NYX;

NYSE- 1,700 net losers;

NAZ- 1,750 net losers;

NDX-8 GREEN;

OEX-17 GREEN;

IBD 100-10 WINNERS;

WINNERS- EDU DWSN IRIS HOLX FCSX SLT HMSY CTRP GENZ WYNN DISH ATVI SERX GILD EXC SO ABT CCU CL AES KO;

LOSERS- just about all the other equities that trade;

VIX- not even higher by 3.75% and a mere 12% above the 10 SMA;

Up volume- 70K/ Down volume- 735K - 10x;

TRIN- 3.05 and way oversold;

QQQQ- the 200 SMA was touched earlier at/near 48.85 and was a bounce area - it will probably hold again and maybe a nice take off area for next week. A big rally is coming - just waiting- and waiting-

MORNING NIGHTMARE

Markets are crushed this morning on the heels of a crummy jobs report and a rising level of unemployment. Not sure that the win last night by Mike Huckleberry was very bullish either.

Strongest sectors - biotechs, utils, China, telecom and insurance while retail, airlines, homies, semis and trannies lag.

Market internals dreadful with 3,200 net losers on the NYSE and NAZ while the NDX/OEX show about 20 winners of the 200 issues. IBD 100 also with 10 issues in the green;

WINNERS- DWSN EDU SLT HMSY ESRX GENZ DISH ESRX GILD AMAT CELG EXC KO PG ALL CI CL MO T SO AES;

LOSERS- just about everything else;

VIX- up 5% to the 23.65 level and 13% above the 10 SMA;

RSI (2) levels near the 1 level on most major indexes;

Technically, we are below all key moving averages and the next area of support appears to be near 1,420 on the SPX and 12,800 on the DJIA. I suspect a big rally is around the corner just don't know how far away that corner is.

And if you think your stocks are off to a bad start, check out these sectors after 2+ trading days:

Semis-7%

brokers-5%

banks-5%

retail- 7.5%

CLOSING NUMBERS

Another dismal day in the markets as an early move higher could not be sustained into the close. The RUT again the biggest loser down by over 1.1%.

Reits, real estate, semis, homies, airlines, gaming, retail, trannies and small caps were the worst sectors while metals, oils, defense and ags were the place to be.

Market internals were flat on the NYSE but way red on the NAZ with 800 more losers than winners.

NDX/OEX internals were also flat while the IBD 100, flush with energy and metal stocks showed more than 60 out of 100 in the green.

WINNERS- FTI CPLA TTES GSOL CMED CELG APOL HOLX TEVA GILD DISH NXY RTN IP ORCL WMB;

LOSERS- LTD CSC EK DELL USB INTC CMCSA F LEH MNST VRTX WYNN RYAAY SBUX BBBY VMED CMG ARGN PCLN ICE ININ PSEM TISI;

The DJIA closed up 13 while the SPX closed xactly unchanged at 1447.16. A little bump after the close has the QQQQ back to $50.55 and the trade from yesterday stays on probably into the middle of the month. Markets remain over sold as evidenced by the following RSI (2) numbers:

SPX 5

DJIA 10

RUT 2

MID 2

NAZ 3

NDX 11

RUDE CRUDE

Markets are trying to push higher on the heels of $100 oil and higher metals prices (shocker). Those two sectors have been the place to be so far in 2008 (1.5 days) and I expect that will continue.

The QQQQ trade from yesterday with a decent $.40 gain and I expect that will continue to move higher as the markets remain very oversold.

Technically, 1,450 is acting as support again and the next stop is probably the 1,475 level or the 13,365 level on the DJIA (200/50 SMA).

The New High list today with lots of oils while the Low list includes tech retail and financials:

ATW XEC HP IGE MON MHS OXY RRC SWN GLD WFT XTO;

The New Low list:

AMD AMAT BAC BBBY FHN F GM KSS WAG WEN ZLC ZUMZ;

Gaming a big loser and not sure why although folks guessing at recession may feel that casinos will not do well. Doubtful that is correct and they are probably a buy here, especially MGM.

MORNING TRADE

Markets are trading higher on the heels of better than expected factory orders after an initial dip lower.

Strong sectors include ags, defense, airlines, oils, emerging markets, utils and banks while gaming, semis, real estate and biotech lag.

Key stocks- half higher- leaders- CELG UA DECK POT NVDA MO KO PG XOM AAPL- lagging are LVS WYNN GRMN MGM BIDU INTC CME ICE MA KLAC and VMW.

NYSE- 725 net winners;

NAZ -FLAT;

NDX-55 WINNERS;

OEX-65 WINNERS;

IBD 100-65 WINNERS;

WINNERS- FTI CPLA CF DNR GMCR BUCY CAM APOL CAM SHLD CHKP CTXS AKAM CTSH BAX RTN NXY ATI IP HAL ORCL GD BUD MO TGT;

LOSERS- LTD CSC INTC CMCSA TXN EMC USB DELL COF VRTX MNST WYNN GRMN SBUX MEE ABB BIDU MA TEF ITU NDAQ ICE;

VIX- flat near the 23 level and still overbought above the 110% of the 10 SMA level;

Up volume slightly better than Down volume on the NYSE;

Technically, the market is again above the important 1,450 level on the SPX and a bullish short term period for the markets may be beginning. However, the NDX- is again under performing and big cap tech is not participating in this rally nor is GS.

Internals on the major indexes better than overall internals and not sure which ones will work today.

PRE MARKETS

In the News:

Crude oil again knocking on the $100 door at $99+ while OPEC again threatens to increase production. Why would they not sell all they can at these prices?

Cramer's picks for 2008:

MO HAL AMZN RIMM AAPL GOOG NYX BMRN LVLT AUY and SVNT;

WSJ with an article on China claiming their stock market is facing hurdles including slowing earnings growth, high valuation and weak recent price performance. The Journal "claims" this is "eerily reminiscent of tech stocks at the start of 2000."

Doug Kass with his 20 surprises for 2008. He claims that half his surprises came through in 2007 but I beg to differ, maybe Dougie feels that if he is close it counts like if he picks the Yankees to win the World Series and the Red Sox win its a correct call because they both are in the American League east- Just wondering.

THE CLOSE

Markets closed off their worst levels but could not get any significant rally going despite the midday try. The DJIA closed down 219, NAZ -43 and SPX -21.

Strongest sectors included metals, oils, internets and biotechs and while airlines, homies, semis, brokers and banks were the worst.

Market internals were weak on the OEX/NDX but the NYSE only showed 470 more losers than winners- NAZ 1,000 net losers; Major indexes far worse than the internals showed;

VIX higher by 4% and trading about 13% above the 10 day SMA;

Up volume about 28% of overall volume and total volume light at 1.35 Billion shs;

10 year Bond rate down to 3.90% and the lowest since early December;

Technically, we closed near the 1,450 level on the SPX and just maybe a little bounce tomorrow on the heels of the expected big inventory draw in crude and way oversold conditions.

My QQQQ purchase near the $50.35 level.

BUY LOW SELL HIGH

Surprise surprise, BUY signals are lining up as the RSI (2) levels have slipped to under 5 on most major indexes with the SPX at 5 and the DJIA at 3.

Volatility indexes also cooperating as they are all now at/near 15% above the 10 SMA.

Fly in the ointment is the indexes are generally below all the major moving averages signifying a pretty angry down trend.

I am going to take a shot on the long side with some QQQQ and hope to flip em sometime over the next few weeks.

OPENING TRADE

Markets open mixed but have since flipped to red on the heels of some lousy economic news (ISM/Construction).

The DJIA -96, NAZ -9 and SPX -8.

Strongest sectors- same old/same old- metals, oils, emerging markets, biotech, drugs and gaming while semis, airlines, banks, financials and brokers are leading lower.

Key stocks -15 out of 40 in the green led by AMZN UA WYNN ISRG POT CELG RIMM LVS and BIDU- while INTC GRMN MS NYX MTW and MER are lagging.

NYSE- 160 net red;

NAZ- 400 net red;

NDX -45 GREEN;

OEX -30 GREEN;

IBD 100-55 GREEN;

WINNERS- CMED VIP AMZN SNCR SWN DNR CYBS KWK ENS FMCN POT BRCM VMED YHOO SHLD ISRG LVLT RIMM NXY HAL SLB CI AMGN BNI ORCL HD ABT;

LOSERS- NSM INTC EMC FDX MS JPM TXN LEH WFC COF MER TISI ABAX OXPS ARGN GMCR GRMN CPLA PSEM DE MTW BUCY EDU DISH LEAP CTSH SBUX UAUA JOYG BBBY;

VIX-higher by 2% and trading at buy signal numbers over 10% above the 10 SMA;

Up volume about 75% of Down volume;

Technically, an ugly beginning for the year and support on the SPX probably near the 1,450/1,460 number. The 50/200 SMA's on the SPX are both above the current price and the (down sloping) 50 is bearishly below the 200. Seems like the only thing bulls have going for them is decent valuations.

PRE OPEN

Futures are trading near fair value as everyone awaits the first trading day of 2008 to start.

In the news:

Crude and gold are starting the new year as if the prior one never ended as oil is +1.75% and Gold futures are higher by 1.4%.

C downgrades REIT's including AVB CPT DRE GGP KRC and O;

YHOO upgraded to BUY at Think Equiy;

DB ups managed health care including AET UNH WLP CI and HUM;

JEF picks MXIM as their top Mid Cap pick for 2008;

C upgrades AMZN to BUY with a $119 target;

BAC downgrades the SEMI group;

ThinkEquity picks DGIT and GIGM as tops for 2008;

Gapping up- CNX CNP NLS CEF ASTI NED LDK BVF GMO FSLR HUM CROX HOKU AMZN YHOO BRCM;

Gapping down- DISH PAY PHH CNTY RESP AMD TISI INTC SBUX UNH TXT;

RSI (2) levels starting the year:

SPX 16

DJIA 10

RUT 12

NDX 13

NAZ 12

MID 12

And lets see how long Mike Hucleberry can stay in the race.

2007 PUNCHED

The year is done and here are the stats:

SPX +3.5%

DJIA +6.4%

NAZ+9.8%

NDX+18.7%

RUT -2.7%

MID +6.7%

Large Value-FLAT

Large Growth +11%

Small Value -13.7%

Small Growth +11.8%

MSH +9.6%

XLK +14.6%

SMH -3.5%

HHH +13%

AAPL +133.5%

BIDU +245.9%

CSCO -1%

HPQ +22.6%

GOOG +50.2%

RIMM +166%

OIH +40.2%

XLE +35.3%

VLO +36.9%

XTO +36.5%

XOM +22.3%

BKX -24.6%

XBD -14.2%

GS +7.9%

IAI -4.9%

MER -42.3%

BSC -45.7%

CME +34.6%

ICE +78.4%

TROW +39.1%

HGX -38.9%

IYR-20.8%

RMZ-20.2%

RLX -17.9%

HUI+21%

SSRI+18.8%

PAAS+38.8%

FCX +83.8%

BHP +76.2%

GLD +30.5%

SLV+14.2%

GDX+14%

MGM +46.5%

LVS +15.2%

WYNN +19.5%

DFX +21.5%

ITA +27.1%

EEM +31.6%

EFA +7.2%

EWA +22.6%

EWH +36%

EWZ +72.3%

FXI +52.7%

Note: Most if not all of the above country funds had large dividends which are not included in the annual return.

Clearly it was the year of the stock picker as owning SPX tech would have been ok but owning AAPL GOOG BIDU and RIMM would have been a lot better. Then again, the oil patch was pretty consistant and owning OIH/XLE was fine.

Next year- 2008- Look for a rebound in financials/real estate/ retail later in the year and metals/energy/ags to continue to do well.

And how did Cramer do with his top picks for 2007:

MO +15.2%

NYX -9.7%

LVLT -45.7%

He clearly would have been better off buying the DJIA and left us alone all year and of course his DJIA year end forecast was 14,500+. Just a bit off.

FINAL 2007 CLOSE

Markets closed lower despite a higher close by financials and flat internals. The DJIA -101, NAZ -22 and SPX -10.

Strongest sectors were homies, real estate, brokers, banks, insurance and retail- leading lower were telecom, oils, internets, trannies and drugs.

NYSE- 160 net losers;

NAZ-200 net losers;

NDX -20 WINNERS;

OEX-20 WINNERS;

IBD 100-30 WINNERS;

VIX higher by 8% and near BUY signal territory;

RSI (2) levels on most indexes in the mid teen levels and near BUY signal territory;

Not sure what happened to the rally in the final few moments of trading but straight down- maybe the last of the tax loss selling although almost all the banks, brokers and real estate stocks I follow closed green. Tech notably ugly as almost all finished in the red.

Finally for 2007, the DJIA closed the year +6.4%, SPX +3.5% and NAZ +9.8%. I will update all the sectors followed before the markets reopen on Wednesday and a Happy and prosperous New Year to all readers.

MIDDAY MARKETS

Markets continue to be under pressure as year end tax selling seems to be dominating today's action. The DJIA -91, NAZ -23 and SPX -10. The RUT is again the worst performing major index, down over 1% and may be the index to own for 2008.

Strongest sectors include real estate, homies, reits and airlines while metals, telecom, internets,oils and small caps lag.

Key stocks- primarily lower as UA VMW MA ICE ISRG NYX INTC BAC and AAPL are green while BG RIMM DECK BIDU LVS WYNN MS CELG MTW and AMZN are leading lower.

VIX- higher by about 8% and trading about 8% above the 10 SMA;

NYSE- 930 net losers;

NAZ- 1,180 net losers;

NDX-20 WINNERS;

OEX-18 WINNERS;

IBD 100-20 WINNERS;

WINNERS- HRBN CMED OXPS FSTR END DWSN BAP VMW WX CLB UAUA MXIM LAMR AMLN CTXS ISRG HANS AXP LTD JPM ALL GD CCU BDK;

LOSERS- DELL TYC ATI CSCO T CVX VZ NXY MS IBM JOYG TLAB JNPR NTAP STLD RIMM GENZ SNDK CYBS ININ DSX TISI LKQX BUCY ABAX ARD ARGN VIP;

RSI (2) levels nearing buy territory:

SPX 16

DJIA 11

OEX 15

NDX 16

RUT 10

Technically, we have sunk below most of the major moving moving averages on the major indexes but tax selling may have lots to do with the recent action in equities. I will let it go at that and will probably look to buy later in the week.

MORE SURPRISES

Doug Kass out with his list of surprises for 2008 on the TSCM sites but before pondering those, I decided to take a look at last year's list. Not sure why folks say he hit on 20% - let me know where I am wrong.

1- TXN and CAT attempt to go private in deals led by private equity - NO;

2- Robert Rubin becomes CEO of Salomon/Smith Barney after C breaks up the company- NO;

3- Housing market appears to stabilize in early 2007 based on misleading gov't stats- NO;

4- A dumping of homes/quantum increase in unsold inventory/dramatic drop of prices- NO;

5- Foreclosures rise to 3,000,000 homes - NO;

6- Hedge funds bite the dust due to credit problems and JPM has a $10B derivative loss-NO;

7- Congress announces a series of hearings on the derivative industry- NO;

8-Commodity prices collapse- NO;

9-Corporate profits end 2007 virtually flat- NO;

10-Equity market volatility rises "exponentially" and the SPX routinely experiences 2% moves- EH;

11- SPX ends the year at 1,250- NO;

12- FIDO announces a short equity product- NO;

13- University's and endowments reduce exposure to private equity- NO;

14- ESL (Eddy Lampert) buys a large entertainment industry company- NO;

15- Cyberterrorism - NO;

16- Hillary/RUDY don't run and Newt/GORE do- NO;

19- GOOG approaches a price of $650 and then takes a large hit- NO;

20- Saddam Hussein assassinated in jail and Osama Bin Laden found dead- NO;

21- Corruption in Russia hits the emerging markets- NO;

22-Hedge funds reduce fees and 50% disappear- NO;

23-Equities demand severely reduced- NO;

24- Maria Bartiromo joins THE VIEW- NO (unfortunately).

25- Cramer cancelled- NO

Not sure what happened to 17 and 18 as they have mysteriously disappeared. Maybe they were 2 that were in the ballpark.

PRE MARKETS

The final day of the year and futures are pointing in the unchanged direction as I type.

Some interesting stuff in Barrons this weekend as they were bullish on LTR and BK and bearish on the Canadian Dollar.

For all the volatility in the markets this year note the following on the SPX:

20 SMA- 1,480
50 SMA-1,481
100 SMA -1,488
200 SMA-1,491

Some predictions since everyone else does them, why not this fish- major indexes to close as follows on December 31, 2008.





And sectors I expect will do well includes energy, materials, retail (second half) and financials (second half).





Note the December 27 earnings estimates for SPX by Standard and Poors now at $101.23. I think these numbers are still optimistic and I expect them to come in closer to the $95 level. Note either way the PE still fairly inexpensive near the 15 level assuming my $95 number.






SPX +7%


DJIA +7%


NAZ +9%





IBD 100 stock ratings of note:





1- BIDU





3- ISRG





4- POT





5- RIMM





8- AAPL





17- NOV





23- GOOG





35- MA





47- FCX





59- AMZN





60 NDAQ





72- GRMN





85- DE





86- ICE





97 -NVDA





100 MTW