A test of
the November low appears to be next as pre close
model downgrades the
forecast to negative. Barometer methodology dictates that if
forecast metrics are on the verge of deteriorating and the forecast is at
caution with a negative bias, the models downgrade the forecast just incase the
bottom is penetrated. In a normal stock market cycle it might be evident-
by now- that stocks could be ready for a turnaround. But in this crises of
banks being unsteady and not really lending, markets are predictably,
unpredictable. A freshly published
Leading Indicator chart shows a further fall to
the November lows, that just may not hold. Two major things are missing in
this turnaround juncture, (1) confidence must be restored for banks and
the economy, (2) a capitulation is needed- but in defense of that is stocks have
fallen so far already maybe the last 20 percent is the "throwing in of the
towel". This indeed is a different market and time- Barometer models are
designed to learn from past experiences, so look for a heads up sooner or later.
open Barometer model
downgraded the Leading Indicator to negative as model data show the
November [S&P 500] low may not test successfully and that stocks could fall
through Barometer support levels next week. The Dow closed off by 1.3
percent, S&P 500 was lower by 1.1 percent, and the NASDAQ closed virtually flat-
major indexes. If we get negative days in
the market next week and Barometer new channel is broke, we could see November
lows (S&P 500) tested. See the new
Barometer Leading Indicator model study for more details for next
Recovery and Reinvestment Act got signed into law
last weeks losses while the stimulus package, aka, American Recovery and
Reinvestment Act got signed into law. The Government appears to be making
it easy for tax payers to follow -just what- the money is for and who gets it,
by documenting it on a new website [www.recovery.gov].
Should prove interesting to see the developments. Meanwhile, the stock
market gets slammed again, nearly doubling last weeks losses, making it a big
hole for investors to climb out of.
The test of the bottom of the bear market could be coming soon and
see S&P 500 chart. Time will tell.
As always, watch the bug for any changes, as right now
we are still
at caution for the forecast.
February, 2009, updated