DJIM #47 2009

The most important thing on Friday was to see following a fast sell off, a hold of 1085 and preferably a close above 1093 to avoid a bearish reversal week.   Narrowly, the Bulls lost as we closed 1.5 pts below this pattern, but with a traditionally 'bullish' holiday week ahead,  it may be just enough for the Bulls.   As we've constantly noted, the Bulls wait for a sell off to settle before giving an underlying bid and seemingly a hit to the futures premarket to 1083ES, may have been the test and go ahead as the market got some bid, we especially noted one in beat up NASDAQ (2 days off chip downgrade & Dell), just after noon.   This action off 1083 ES, which is about 1085 cash confirms our belief this level is the support we are going to be monitoring on any weakness ahead (…"..We'd watch 1085 to bring out the underlying bid if it has time to flatline there and not be reached because of a negative catalyst…/  still, we'd preferred to have tested 1085". ).  A break at this level and 1070 will be quick and 1050 will not be far behind.

Heading into the short week, we continue to say the story remains the same and the rally is intact.  JPM boldly raised SPX to a 1160  close on Friday, so we're not the only Bulls looking for a good end to the year.  The strategy remains the same, accumulate some favorites, and buying your favorite stocks on any sell- offs as last week provided.   Despite a holiday week, (Mkt closed Thusday, 1pm Friday), we will have some eco data, including FOMC minutes to watch.  Also, European data (PMI's ) may matter more than usual.   So, we continue to be at the mercy of the USD and volume is indicative of no conviction buyers and no sellers.   This might be advantageous to making a move as the sparse sellers will allow buyers to move stocks quite easily with trading desks emptying more and more as of last Friday.