Morning comments

Good morning: Daily CommentsFed and company on Tuesday showed they would throw every last weapon at the recession, maybe the shoes are next. As we stated in our S&P Review piece from December 4th (The Keep It Simple Stupid Post) the 30 day moving average had proven to be a major residence that we thought once taken out would mean a move to 900 on the S&P 500. On December 8th we got that move, and the sell off that came after reversed yesterday (finally, the first intraday moves looked almost like shock).

We continue to see a range bound market with our bias to continue to add small to positions on the long side on pull backs. A close above 925 on the S&P would be a bullish sign that we may test 985 or even 1000. Near term support is 876, and a close under 848 would signal a possible retest on the 800 S&P level.

As we stated over a week ago, the market’s ability to shake off the bad news of the unemployment numbers was a good sign, and now the Madoff swindle news seems to have been ingested. All this bad news and moving up or sideways is a base building. Just a lot of recycling of shares happening now...Hedge funds trading the dips and selling the “hot potato” at rallies.


posted by Peter Greene