WEEKEND LOOK

Some interesting reading this weekend and starting with Barrons- a good article on avoiding mistakes which can hurt your eventual nest egg- they are- 1) high expenses 2) asset allocation and 3) timing the markets.

David Williams of the highly rated UMBIX fund - hunting for cheap stocks and admits that it is a promising time to look- what he likes now- FCX LEH JCP IVZ PBR- year to date- his fund is down 8.83% which is in the top 12% in its category -and over the last year- top 5%, 3 years- top 4% and in the last 5 years his fund ranks in the top 2% in its category. The fund has a beta of 1.18, Alpha 4.25 and a Sharpe ratio of .48- 5 *'s with HIGH risk and HIGH returns- all according to Morningstar.

Kopin Tan with a fine column and some nice stats for 2008- investor skittishness on Fridays according to Kopin- as investors get nervous before weekends- the facts from Darren Clipston of Tallis Capital Management-

"a trader who shorts the market late Thursday, goes long at the end of Friday, and then takes profit after the Monday bounce would have returned 9.9% so far in 2008."

And Kopin also talks to Justin Walter of BESPOKE-

"As ugly as these numbers were, the market still isn't as oversold as it was during January's plunge. The S&P 500 today is barely below its recent trading range. Its price-to-earnings ratio actually climbed to a new high as the index made fresh lows, chiefly as earnings fell faster than price.

On the other hand, financial stocks are extremely oversold, with just 4% of these holding above their 50-day moving average. "Since the market is primarily focused on the troubles with banks at the moment, a bounce in this sector will help the broad market"

Not sure where Justin gets his numbers from but the S&P site has 2007 earnings (still estimated) at $84.05 (15.4 PE) and an estimate of $98.63 for 2008 earnings- (13.1 PE).

Larry Nussbaum at his excellent site "MILLIONAIRE NOW" with some interesting information on SILVER and the ETF.

Dr. Brett with some good links this AM - but I like this one the best.

Finally- IBD 100- stocks in the group for the next week include:

1- POT

2- BUCY

5- RIMM

6- ISRG

11- AUY

17- RIO

24-MA

50-DE

67-DLB

69-ITU

83-CNQ

And FWIW- from the recent highs- (generally October 2007) to yesterday's close-

SPX -18%

DJIA -16.%

NAZ -23%

NDX -24%

RUT -23%

IBD still calls the markets in a "correction" looks like everything but the SPX and DJIA is in a bear market- and those two aren't far away from the 20% number.

And speaking of bear markets and market corrections, the 61.8 FIB retracements coming into play on the major indexes- where?

SPX 1,270 - (H 1576 L 769)

DJIA 11,500 - (H 14,198 L 7,200)

NAZ 2,190 - (H 2,862 L 1,108)

NDX 1,690 - (H 2,240 L 795)

TECHNICALS -SPX

A few weeks ago, I was looking for a breakout in the SPX in one direction or the other - in light of the recent tight range- and one indicator I was looking at for direction was a move of the Bollinger Bands outside the Keltner channels. Well that has now happened (click on picture) as the markets have moved to the down side. Note however that the 1,270 intra day low on January 23rd has still not been touched.

A move down to those levels is probably in the cards for next week as is probably a move back to today's high near 1,315. Note that 1,315 was prior support and it showed to be pretty pretty good resistance today on the morning melt up.

The 50 SMA also coming back down and a recent test of that level at the 1,370 area would not be shocking to this fish.

CLOSING MOVES

So another wacky day as the DJIA closes down 147, NAZ -8 and SPX -11. Buying near the open- a selloff until 2:45 and then more buying with another sel loff near the close. And where is Sam Zell with his "no way a recession" from a few days ago?

Strongest sectors- and closing green were reits, semis, banks, internets, brokers and insurance while ags, metals, airlines, oils, emerging markets and defense were the worst.

NYSE- 855 net losers;

NAZ -660 net losers;

NDX- 37 GREEN;

OEX- 30 GREEN;

IBD 100- 14 GREEN;

VIX closes near the flat line and 10% above the 10 SMA;

Heavy volume at 1.7B with Down about double the up;

RSI (2) levels generally at/near 5 on most major indexes with the NDX at 12 and out performing;

Interesting also how the NDX doesn't seem to want to close under 1,700 despite dipping under many times in the past several weeks.

OIH closed down $4+ and probably back in buying territory for a flip back to $180 in the next week or so.

And how about the closing price on ABK- $9.5 and up 28% on the day;

OPENING SURPRISE

So who didn't expect a lousy job number and why are the markets up in light of all the bad news? Maybe they were just a bit oversold and maybe most of the sellers got out yesterday during the big sell off.

Anyhow, DJIA +35, NAZ +20 and SPX +7.

Strong sectors- banks+2.8%, semis +2.7% and at/near 50 SMA, brokers+2%, real estate, small cap value, homies, and retail while ags, oils, utils, metals and gaming lag.

NYSE- 400 net winners;

NAZ- 250 net winners;

NDX -70 GREEN;

OEX- 65 GREEN;

IBD 100- 38 GREEN;

Up volume double Down volume;

TRIN- .60;

Markets are surprising most but I suspect we are not out of the woods just yet. Also, I suspect many traders covered their some/most shorts early this morning at/near the open. I know I did.

PRE MARKETS

Jobs number- lost 68K- and if you take out the increase of 38K in government jobs- the private sector lost more than 100k. The month of January jobs was also revised and now is also a negative number. And the Fed Funds futures are pricing in a 100% chance of a 75bps rate cut in March.

Crude oil- down 20 cents at/near $105.25;

Gold- at/near $980;

Silver at/near $20.35;

ES Futures- -13;

NQ Futures -9;

YM Futures- 128;

How many traders are going to want to short any rallies?

And what exactly is George W Bush's legacy going to be?

THE CLOSE

There it is - there it was- markets close at 52 week lows and who knows whats next. The DJIA closed down 216, NAZ -52 and SPX -29- closing at 1304. The prior closing low was on rogue trader day back on January 22, 1310.5 with an inter day low of 1,270 on the 23rd of January.

Strongest sectors- metals, defense, oils, ags and drugs while brokers, airlines, homies, real estate, retail and gaming lagged.

NYSE/NAZ - 4,200 net losers;

NDX -9 WINNERS;

OEX- 5 WINNERS;

IBD 100- 7 WINNERS;

Down volume almost 20X Up volume;

TRIN 2.23;

VIX- higher by 13% and 13% above the SMA 10;

RSI (2) levels:

SPX 10

DJIA 8

NAZ 11

NDX 15

RUT 7

MID 10

So the big news is markets are over sold and the big news is markets broke through key closing levels. Personally, I think the 1,270 number is more important as the inter day low and also the 61.8% fib retracement between the high of 1,576 and the low near 780.

Don't be surprised if there is a nice bounce tomorrow making the folks who just got stopped out re buy.

THE OPEN

Markets are lower again as the 10:00 housing numbers were ugly again. The ugliest number in the bunch- almost 9% of folks who have loans on their homes are delinquent. Hard to put a happy face on that number.

Anyhow, DJIA -122, NAZ -11 and SPX -15.

Strongest sectors- ags, biotech, oils, large growth, drugs and tech while brokers, airlines, banks, homies, real estate and retail lag.

My screen continue to point to an out performance by the NDX as GOOG BIDU GOOG are all green while the NDX is down by .15% compared to a .98% sell off on the SPX.

NYSE- 1600 net losers;

NAZ -830 net losers;

NDX- 30 GREEN;

OEX-12 GREEN;

IBD 100- 30 GREEN;

VIX- higher by 6%;

TRIN- 1.87- very high;

Down volume 6X Up volume;

10 year Bond- 3.63% - just a place to rest money until a better home is found-

Checking the 10 day chart on the SPX- lows near 1,305 and high near 1,390- so the range remains until it gets broken.

CLOSING TIDBITS

Markets closed the day higher after an initial rally that failed on the ABK news- then back up in the afternoon.

Strong sectors- the usual suspects- oils, metals, ags, emerging markets and tech-while biotech, financials, banks, drugs and real estate lagged.

NYSE- 600 net winners;

NAZ- FLAT;

NDX- 70 GREEN;

OEX- 65 GREEN;

IBD 100-75 GREEN;

RSI (2) levels on major indexes:

SPX 49

DJIA 39

MID 47

RUT 38

NAZ 54

NDX 62

OIH 75

XLE 66

XLF 2

XLK 70

Looks like the NDX is starting to outperform a bit - not sure how long it lasts but for the mean time I will take it. Also check out the oils as crude was up $5 and what ever happened to T

Boone's short crude trade. OIH also up 2.6% plus on the heels of the crude move.

Still watching 1,340 on the SPX as that level was soundly rejected at today's top. Note also the 24 point range in the SPX again- Overall range on the SPX of late 1390/1310- or about 80 points and today's range- 24 of the 80.

MIDDAY TURN

Markets are all over the board but primarily down now as I type with the ABK news finally out and sold despite Dennis Kneale's feeling that the market will love the news. Eh Dennis, the news was baked in the cake days ago as it rallied when ever Gasparino's mug was on the screen.

Weakness across the board now in the brokers/banks with the XLF lower by 1.3% after being higher this morning before the AMK news.

Strong sectors- oils, metals, internets, emerging markets and semis while airlines, biotech, financials, utils and drugs lag.

NYSE/NAZ internals FLAT;

NDX - 50 GREEN;

OEX- 40 GREEN;

IBD 100- 75 GREEN- (oils/metals);

IBD 20- 12/20 GREEN led by FLSR GG OXY HES POT PX CNQ RIG;

VIX unchanged;

TRIN- 1.34;

Down volume a hair move than Up;

The 1,340 level on the SPX was soundly rejected this morning and a drift down and a break of the recent lows from yesterday are probably in the cards before the end of the week. Not sure of what a catalyst will be to keep that from happening.

Finally, markets not happy with ABK as it is down by 15.5%;

THE OPEN

Markets are way up this morning but are approaching the first level of resistance at SPX 1,340. The DJIA +97, NAZ +22 and SPX +12.

Strongest sectors- oils, brokers, retail, metals, emerging markets and telecom while biotech, airlines, utils and drugs lag.

Key stocks generally higher led by ICE NVDA LVS TIF MGM MSFT UA BG ISRG MS- losers BIDU RIMM AAPL BAC MA BAC CELG DECK XOM;

NYSE- 1350 net winners;

NAZ - 780 net winners;

NDX-80 GREEN;

OEX-90 GREEN;

IBD 100- 80 GREEN;

WINNERS- ARD TISI CEDC VIP SVR NDAQ CLR ROS RYAAY VMED LOGI STLD LLTC LEAP AKAM JNPR ATI WFC RF ORCL SLB MSFT HA S BHI ROK;

LOSERS- AAPL BAC BAX AEP MRK PEP ABT SO FMCN RIMM APOL ADBE BIDU UAUA MR FMCN HRBN CVA DLB VIVO;

Up volume 5x Down;

TRIN .54;

VIX - lower by 4%;

Crude up about 3% on a bigger than expected draw- and OIH up $4.5 near $178

Please be careful with longs here as shorting near these levels has worked over and over-

PRE OPEN

Markets are set to continue their late day rally from yesterday this morning and some good work on the charts from Captain Kirk and Trader Mike.

Gold tumbled yesterday but is bouncing back this morning trading near $974 while silver is still way up at $20.15. Dennis Gartman, the well respected commodity/stock trader is looking for a DJIA/GOLD ratio to eventually hit 9/1- not sure of the time frame - but both will probably be at higher levels.

And can all those tax cutters out there please help me with this. Probably W's lasting legacy. On a final note, why didn't all those republicans who are screaming about democrats letting W's tax cuts lapse- why didn't they extend them in 2006 before they knew they lost power?

THE CLOSE

So much for the break under 1,310 as Gasparino and his ABK crew and Johnny Sunshine from CSCO were there to help save the markets for another day.

The SPX hit a low of 1,307 but closed considerably higher at 1,327 after Charlie and Johnny did their work.

Strongest sectors- utils, airlines, internets, homies, semis, trannies and tech while metals, oils, ags, defense and brokers lagged.

AAPL RIMM BIDU MER MA ICE were to the good while GOOG continues its trek lower with the next stop of perhaps $400.

As usual all the brokers and banks were down but well off their lows- MBI ABK both up but not as much as one would think in light of the Gasparino story.

Market internals- still closed pretty poor with 1,700 net losers between NYSE and NAZ;

NDX- 45 GREEN;

OEX- 33 GREEN;

DJIA 6 GREEN;

TRIN- 1.05

VIX -lower by 2.5%;

Up volume about .5 of Down volume and big over all at 1.75B shares traded;

Not sure I would be in a great rush to buy the markets as overhead resistance is near by at 1,340 and then 1,360- And until it stops working- expect most traders to sell those levels aggressively.

The long NDX short SPX trade also looks ok here on the reversion of to the mean.

USUAL MORNING

Same old markets as we are down 117 on the DJIA - 22 on the NAZ and 13 on the SPX.

Strongest sectors- utils, metals, gaming, ags and the NDX while the brokers, banks, airlines, emerging markets, telecom and real estate sectors lag.

Market internals are awful with 3 down to every 1 up on the NYSE and NAZ;

NDX- 18 GREEN;

OEX-17 GREEN;

IBD 100- 20 GREEN;

Ugly stocks include GOOG CMED FMCN CEDC CNQR UAUA LOGI MICC NVDA DISCA APOL C WB TXN S JPM RF COF BAC ORCL;

VIX - barely moving and up 1%;

TRIN- 1.55;

Down volume about 5X Up volume;

Seems like a crucial area on the SPX a few points above 1,315- if it holds we could get a nice bounce- if it fails we could fall another quick 10/15 points which may be also be a nice buy area.

RSI (2) levels way overdone:

SPX 4

DJIA 3

NAZ 3

RUT 3

- the only caveat -its a bear market.

PRE OPEN

Looks like the usual start to the day with the futures way down and more bad news out of C (job cuts in the 30K range and not enough capital according to certain big investors) and INTC (declining gross margins). No fear- the guy in the picture sees big bargains in GOOG/AAPL etc- forget the broken stock rule.

The 1315 area on the SPX is recent support and a breach of that area could set of a major wave of selling. A long side trade from there once the selling subsides may make sense.

Bernanke in the media as I type with the following:

"current housing woes differ from past due to widespread negative equity"

"more should be done to stem foreclosure increases"

"supply demand imbalances suggest further declines in home prices likely"

Gapping up- QSC BITS SNTS TSL SUPG OVEN FNSR PRFT BEXP FLML MNKD IPCS GFI AAU AU AUY CHRD BRL RAME GCO GRPT ESI CPLA JASO LDK;

Gapping down- JTX OMPI CLWR NCS BKS CCRN PMI XIN SLXP LF HMIN PBR SD AVAV SNDK NOK ALU ERIC INTC AMD HBC C UBS BCS BSC MER;

CLOSING CHOP

A choppy day on the street as the markets essentially went nowhere but travelled far to get there. My guess is if you thought it was going down you got stopped and if you thought up was the way- you got the same result.

Strongest sectors- metals, utils, oils, reits and retail while airlines, homies, banks, internets and brokers lagged as usual.

Not surprising but big cap and the NDX lagged again- a bit unusual with about half the NDX stocks up and half down. GOOG AAPL RIMM BIDU all spit the bit and its just difficult for NAZ/NDX to move up with out those stocks.

OEX- 45 WINNERS;

NAZ- 785 net losers;

IBD 100- 60 GREEN;

RSI (2) levels- continue to hover near the 7 level on most major markets;

VIX closed green;

TRIN - .96;

Volume was heavier than normal and about even between winners and losers.

And just checking my screens, most banks/brokers lower but CME/ICE closed green.

Almost all of my metals closed higher with AAUG ABX AEM AUY GBN GOLD SSRI PAAS and FCX up 2% or more;

And after the big day on CNBC- BRK.A closes down almost 3%- maybe shareholders didn't like the news on the insurance front or didn't like that he announced again that he was for HILLARY OR OBAMA.

Tech was very ugly with the following stocks closing ugly- HHH SMH AAPL AKAM AMZN GOOG INFY KLAC RIMM and SNDK.

Hopefully, tomorrow is turnaround Tuesday and Marc Faber stays off the air.

LUNCH TIME LOOK

Markets actually not so horrible with internals on the green side at the NDX/OEX/IBD 100- The bad places to be - financials and big cap tech. AAPL BIDU RIMM GOOG all solidly red while the XLK is flat. Also, note the NYSE internals- 1450 GREEN and 1550 RED-

GS BSC LEH LM MER MS TROW NDAQ NYX AIG BAC C JPM USB WFC all also red as the financials only see negative moves for now.

Metals, oils, ags, trannies, biotechs and retail leading while airlines, homies, financials, insurance and brokers do their usual thing.

Up/Down volume also near the flat line;

VIX- nearing the flat line;

TRIN- 1.03;

An afternoon bounce would not be surprising as we are quite oversold after the sell offs from Thurday and Friday last week.

WINNERS- NEU TITN MTL AUY SWN GGB ABV NGS TTES CDNS NTAP EXPD ESRX CEPH MICC MRVL STLD CTAS SLE AA WY AES COP BK ETR AVP CMCSA CAT;

LOSERS- F LEH BA AAPL RF GOOG UTX C HIG S GS UNH AMLN UAUA APOL HOLX AKAM JNPR GRMN JNPR QCOM RIMM TLAB;

Oh and check the price of GLD- up another 1% at $97.3 while the HUI is higher by another 3%;

AUY FCX GDX GMO PAAS SSRI all ripping higher - silver also up 2%;

THE OPEN

Another day in paradise as the markets open lower again with the DJIA down 85, NAZ -11 and the SPX -7.3.

Strongest sectors- metals, oils and biotech while financials, airlines, homies, insurance, gaming and brokers bring up the rear.

Key stocks- 10 out of 40 higher led by ICE MTW CELG XOM CAT KO MSFT GE- losers- BG DECK C BAC MGM KLAC UA LVS MS WYNN RIMM;

NYSE- 900 net losers;

NAZ- 800 net losers;

NDX- 45 WINNERS;

OEX- 40 WINNERS;

VIX +5% and sitting in "buy the market if we were in an up trend numbers; almost 14% above the 10 SMA;

TRIN- 1.31

Down volume - double Up volume;

Everyone expecting a retest of the January lows - me- not so sure - just seems like toooo many folks expecting it- and if it comes - I suspect a ton of buy orders after the immediate plunge below- if and when.

And how about math whiz Warren?

WEEKEND TIMES

Check out the nice article by Gretchen Morgenson of The NY TIMES- as she checks in with Charles Biderman of TrimTabs. Apparently Charles has come up with a new consumer spending index and it isn't pretty. Her are some of the salient points of the article:

The big picture is: the amount of money people have to spend, which includes money on real estate transactions, is plummeting, and it started to break down in October”

Mr. Biderman said his data, in contrast to the indicators the federal number crunchers produce, are contemporaneous and offer much more insight into what is happening in the economic here and now.

He said data from the Bureau of Labor Statistics and the Bureau of Economic Analysis rely on outdated figures and outmoded methods.

Mr. Biderman’s assessment of current employment and personal income pictures, for instance, is gleaned from sources that include daily deposits of withheld income and employment taxes reported to the United States Treasury. This compares with the monthly employment analyses put out by the Bureau of Labor Statistics, which are preliminary and, Mr. Biderman says, based on flawed surveys and extrapolation of historical data.

No surprise, he says, that the initial figures from the bureau are so often adjusted significantly later on.

TrimTabs calls its new measure the Consumer Spendables Indicator, and it sensibly includes these crucial sources of consumption cash: after-tax wages; after-tax income from nonwage sources, like capital gains, dividends, pensions, partnerships and self-employment; and net equity extraction from consumers’ homes, either through property sales or mortgage refinancing.

For the first time since the fourth quarter of 2003, TrimTabs estimates, consumers will have less money to spend this quarter on a year-over-year basis. The firm expects this figure to fall 0.6 percent from the same period in 2007.

TRIMTABS, which estimates employment growth using data from an online job index and an analysis of income tax withheld versus job creation rates, has been far more accurate than the Bureau of Labor Statistics. For example, in 2006, the government’s initial estimates of employment growth came in at 1.52 million jobs. But the bureau revised that data upward in February 2007, for a total of 2.24 million.

By comparison, TrimTabs’ estimates of 2006 employment growth, using real-time data, totaled 2.39 million jobs. The firm reported those figures to clients contemporaneously.
Last week, TrimTabs told clients it estimated that 77,000 jobs would be lost in February; Wall Street economists are calling for a gain of 30,000 for the month.

Since October 2007, TrimTabs estimates, the economy has lost about 175,000 jobs, the first sustained employment drop since early 2003. Growing job losses naturally will contribute to a weakening consumer, whose ills will affect the overall economy. And the stock market is feeling this pain as well, in Mr. Biderman’s view.

Now for the good news:

Happily, Mr. Biderman does not expect the recession to last much longer than the end of 2008. “I see this thing lasting longer than the bulls think but not as deep as the bears expect,” he said. “People will start feeling better late this year.”

The IBD 100 for this week includes the following- and note a new addition CNQ- a large holding for two of my favorite funds FAIRX and WGRNX:

1- POT

2- ISRG

6- AUY

9- RIMM

18- RIO

28-MOS

33-RIG

37-MA

55-NDAQ

56-DE

84-CNQ

95-MTW