Political and Market Outlook for week of February 2nd, 2009

I have taken a look at the charts and I still believe a few things about it. First, I don't see us breaking below the lows of the market. That is important because every other view is based up that one. Secondly, we have been in a relatively tight range for 12 consecutive days (7,850 and 8,450) and that it is at the bottom of the larger range of between 7,300 and 9,300 on the Dow. Thirdly we are setting up a "W" pattern on all 3 major Indexes. This would suggest to me we are in for a rally to go back up to the higher end of the range of the Dow (8,500-9,300) soon. Much of the earnings announcements are now in with almost 1/2 of the earnings announced. There are still 149 companies yet to report.

So here is my strategy. First regarding ETF's, in hindsight, it might have been a good move to take the profit on those two I have, SSO and TNA at the top, but I didn't so I missed a round trip profit and the time for a profit will be delayed. Some of you may have already sold them and taken a profit and I say good for you. No excuses here. Having said that, if the market goes down any lower I will add to my positions, especially TNA, as I wanted more shares when I recommended it but trying to manage cash flow in tax deferred accounts can be difficult when you can't just write a check when you want. So my plan is to add more shares on any pullback. I would also like to add to my Ford shares as well as Apple shares on pullbacks.

This week we will know if we are forming the second leg of the "W" pattern and whether I have read this market correctly.

On a pure political note, rumors are spreading that President Obama may offer Commerce Secretary to New Hampshire's Republican Senator Judd Gregg. This has been confirmed by Gregg. The fascinating part of this story as it is explained is that President Obama wants to have a BiPartisan Cabinet and that would help by having Gregg. However, if he does that, the Democratic Governor of New Hampshire most likely will pick a Democrat to fill the Senate seat guaranteeing the Democrats a 60 vote filibuster proof majority in the senate. Does that sound like a bipartisan move to you? Don't misunderstand me, I like the idea, but it is not bipartisan. It is very partisan.