Market outlook for March 3rd, 2009: Calmer

In pre-market today, it appears that World markets are calmer after the big slide yesterday. Our Dow lost about 300 points and it closed at 6,763 while the S&P 500 closed at 700. Both Indexes closed at the lows for the day or very close to it. The Put to Call ratio closed at 1.07 yesterday and while high it did not go high enough to warrant a Buy signal as we have had a number of days at or slightly above this level. From a Candlestick pattern, the Dow's action yesterday did not create an "inverted hammer" pattern, as I had hoped. Here's a definition of an Inverted Hammer: A one day bullish reversal pattern. In a downtrend, the open is lower, then it trades higher, but closes near its open, therefore looking like an inverted lollipop. So I am not confident we will actually reverse the downtrend today however any moderation will be welcome and a relief.

The major effect on markets today will be testimony by Fed Chairman Bernanke and Treasury Secretary Geithner in Congress. It can go either way based upon Geithner's previous poor showing. My guess is there will be increased volatility as he speaks.

Also, on CNBC this morning, Larry Lindsey, former Bush Administration National Economic advisor said this morning that the Obama Budget is a "World Game Changer" and a "Downpayment on becoming a Welfare State". He said foreign governments will not want to buy our debt and that can cause our currency to devalue. How do those comments sooth your nerves. It troubles me a lot they are saying things like this.

Futures in Europe are mixed with the German DAX and France's CAC up slightly with the British FTSE down. At 5:45am PST, the Dow Futures show a Dow up about 90 points at the open.

We are in limbo land at these levels on the Dow. If we could climb back up over 7,200 on the Dow in the next few days we may prevent going lower to 6,200 on the Dow. But events are not encouraging that will happen.