Dow chart and market prediction. (UPDATE 2)

I have had many readers ask me where is the market headed? Of course, I have no clue, nor does anyone else, as it is all a guess. The more correct answer is that it depends how much manipulation various governments want to use in this crisis. In my humble view, most government leaders are risk averse. They don't want to go it alone, so they try coordinating actions with other world leaders. This crisis hasn't yet allowed the space for this to occur, but I expect some meeting will be held so that various Finance ministers can coordinate an action to calm nervous investors worldwide. But in the meantime, we could have a continued free fall.

In early trading this morning, it is evident this is happening in Europe again today. After the CAC, DAX and FTSE were all down over 3% yesterday, they are down again today another 2% roughly. All eyes are now firmly in place watching us and what the numbers are for our Unemployment rate for July, which comes out in about 30 minutes, as I write this. (Suggest you read yesterday's previous post to see what various numbers should do to the markets this morning) The Dow Futures were down about 50 at about 4:00am PST but have adjusted to now being down only 15 points in anticipation of about a 9.2% Unemployment number coming out in a half hour.

The chart below is of the Dow for 10 years. I have taken the liberty to draw a number of Support levels which show when we go through one, which level is next. You see it is possible in a world where fear becomes to take hold, we could go down and retest the 6,400 level on the Dow which was reached in 2008. I won't go into any theory why this level is important, but a short version is that this level was never retested and many of us thought back then that we could go much lower to say 4,000 on the Dow. So for now, if you save this chart, you should know when we turn back up as one of these levels would hold and the bounce back would come from that point and the previous support level would become resistance on the way back up.

Come back later during the day today as I may update this post several times, depending on today's market action. Thanks for visiting now.

UPDATE #1: 5:35am PST
The Unemployment rate for July came in unexpectedly at 9.1%. Revisions were made to previous months as well, showing more job creation than expected. While very good news for today and the market, longer term the jobs created were relatively meager in the scheme of things. Our economy needs more than 117,000 Non Farm Payroll jobs created. July's job growth came in Healthcare. The Private sector added 154,000 jobs for July. The average work week remained the same at 34.3 hours/week. Average hourly earnings were up 0.4%. The Dow Futures were up 125 points immediately after the news but have pulled back to being up 75 now.

UPDATE: #2 11:05am PST
Well, there have been wild swings all morning, some based on the Unemployment report and some from the problems with Italy's debt and then a rumor floated by the news media, that the European Central Bank will be buying debt directly. What to make of this news is that it is some rumor, some fact, because the ECB has said they are considering this action.

The thing I would pay attention to is the close today on the Dow. Remember yesterday we broke below the 11,500 support level. So it is important to see where we close. Do we have a rally and close over 11,500 on convincing volume or do we close below that level. Right now, there is a battle going on between the Bears and the Bulls. Longer term, I believe the Bears will win this battle and the markets will go down significantly.

Market comments for July 15th UPDATE

The CPI data came in at -0.2% in June, compared to +0.2% in May. Core CPI came in at +0.3% in June and was up +0.3% in May. This is showing that core prices are really rising as many feared. This economy is sounding more like we are in "stagflation". These CPI Core numbers are in line with what is happening with what has happened to the Core PPI numbers as well. In June Core PPI rose to +0.3% from a May reading of +0.2%.

The Empire State Index came in at -3.76 in July versus in June it was -7.96. Expectations for July were for the number to be 0.0, so this is not a good number and indicates a slowing business climate. That's hard to imagine given the business climate has felt like it has almost stopped the past 3 months. This data is in line with the Inventories data which is also rising and showing that Manufacturing is slowing down even further. This data is feeding into fears a double dip recession is going to occur.

Later this morning, Industrial Production data will be released for June, as well as Capacity Utilization and Michigan Sentiment data for July. Here's what to watch for Industrial Production came in in May at +0.1% and expectations for June are for a +0.3% reading. I expect the number to disappoint. Capacity Utilization came in last month at 76.7% and expectations are for a reading of 77%, indicating more usage of existing capacity. I think this number will disappoint as well and be below 77%. And lastly, Michigan Sentiment in June came in at 71.5, and expectations are for it to be 70.0% reading. I believe this number will be somewhere between 71.5% and 70.0% and will not be off by much, resonating with the general feelings in the country of negativity, partly based upon the politics of the moment on the issue of whether the Congress is going to raise the debt ceiling and also the higher Unemployment numbers this month. The trends are not good and we may be very close to going back officially into a recession.

Bah, humbug! The Futures look positive this morning in advance of this data. The Dow Futures indicated +44 before the CPI data came out and the Empire State Index. Now the Dow Futures indicate a +43 reading, so nothing has really changed with respect to the Futures.

Today is Options Expiration for July so expect high volume today.

UPDATE: 6:55am PST

Industrial Production came in at +0.2%, not +0.3% as expected. But the huge news is that the Michigan Sentiment came in at only 63.8 vs an expectation of 70.0 and a reading last month of 71.5!!! This is a huge disappointment but a realistic data point on how people are really feeling.

Capacity Utilization came in at 76.7%, same as last month and not the 77.0% expected.

Market comments for June 9th UPDATED

Today the Initial jobless Claims were reported. It marked the ninth straight week in which applications have been above 400,000. That trend represents a setback after applications had been declining all winter.

Applications had fallen in February to 375,000, a level that signals sustainable job growth. They stayed below 400,000 for seven of nine weeks. But applications surged in April to 478,000 — an eight-month high — and they have been stuck above 400,000 since then.

The Futures are running +40 for the Dow, +4 for the S&P and +6 for the Nasdaq. Hard to believe that the market will bounce up today and that news but it looks like that is what is in store for today. As you can see from the chart below, we are due for a bounce up at some point and maybe it starts today.

European markets are up a little this morning and it looks like the Central Bank President Jean- Claude Trichet will signal today that policy makers intend to raise interest rates as soon as next month. As a result, the euro climbed against the yen and the dollar.

UPDATE: 7:30am PST

According to Bloomberg.com, European Central Bank President Jean- Claude Trichet signaled the bank intends to raise interest rates next month, saying “strong vigilance” is warranted to contain inflation.

Latest data confirm “continued upward pressure on inflation,” Trichet said in Frankfurt today after the ECB kept its benchmark lending rate at 1.25 percent, as forecast by all 52 economists in a Bloomberg News survey. “Accordingly, strong vigilance is warranted.”

Unemployment Rate rises to 9.1%!!

The Unemployment rate for May rose to 9.1%. Wednesday I made a prediction that the rate was going to rise to this level and that could be what others in the market expected, hence the selloff two days ago. This will have a very negative impact on the stock market today and continue the downtrend of lower lows, followed by lower highs.

Non-Farm Payrolls for May were 54K jobs added. Expectations were for 169K. In April it was reported we added 244K new Non-Farm jobs, but today, that number was revised down to 232K.

These data released today combined with previous data this week of a much lower Consumer Confidence (60.8 vs. 66 in April) and much lower Chicago PMI number (56.6 vs. 67.6 in April) have the Futures market for the Dow down -142. This is going to be a rough day for the Bulls and a rough week as well.

Next week this trend will continue!

Market comments for Jan. 28th

There was plenty of news in the world yesterday to get investors rattled, including riots in Egypt, but the Futures were up in pre-market. Also in business here, Ford had a bad 4th quarter, adding to the real data about the economy. Their profits plunged 79% unexpectedly, commentators said. I don't think the Consumer has been spending much money on cars and trucks so it didn't surprise me. Did it surprise you? I doubt it.

This morning more data was added on the heap of news. Advanced GDP number for the 4th Quarter came in at only 3.2%. Expectations were for 3.8%, so this validates the 4th Quarter was indeed weak. When this number gets revised, I will bet it is revised downwards. The markets have all reached their peaks recently with the Dow hitting 12,000, the S&P 500 hit 1300, the Russell 2000 has previously hit 800 and only the Nasdaq has fallen short of 2800, its high back in 2007.

Now what? How about you tell me what you think where we are now headed! You try this for a while. :) Seriously, Bernanke may want to continue to inflate the stock market as he has recently admitted to, but then it is just another bubble to deal with that will burst and hurt everyone. I can't say when it is going to burst, but when it does watch how surprised and scared everyone will be, including you if you don't take the right actions now. If you have stayed in this market for the past year and haven't taken your profit, what are you waiting for? Only greed can be driving you at this point is my guess. If you have been short this market for a while and hurting form doing so, why throw in the towel now, especially since you have already endured the pain of this manipulated market. Hang in there and you will be rewarded soon. I hope you have been buying more shorts lately to average down your costs and improve your profitability when this market turns. If you are in cash and have been in cash for a while, why are you reading this Blog? Get a life and go outdoors and enjoy the sunshine.

Market comments for Nov. 30th

Well QE2 saved the market from much heavier losses yesterday, I'm quite confident. The market turned around about an hour before the close from the Dow being down about 160 points to closing down less than 40 points. You can see the chart for the moment it started but it did. After all, we don't want those shoppers to be depressed as the Shopping season is upon us. However, over in the Euro zone things are much different. Their markets are correcting without the kind of intervention we are having here. Expect the same to happen today.

The pre market indicators show the Dow down about 85 points in pre-market and the S&P 500 down about 10 points. That keeps putting pressure on the Dow to stay below 11,000 and below the 50 day Moving average. Nasdaq Futures are down about 20 points. German markets and France's CAC index are down about 0.5% while the English FTSE is down about 1.25% at this hour.

Housing prices were down about 2% in Q3 according to the Case Shiller report. I must be away at work today so look for the Consumer Confidence number to come out at 7:00am PST. The expectations are for an increase to 52.0% from the prior reading of 50.2%. Oh, and the Chicago PMI is expected to come in at 58.0, down from the 60.6 reading last month.

Market comments for Nov. 26th

Well, it's a short market day today but I can't keep the same prediction as I had yesterday. Today is pointing down around the world. The debt crisis in the Euro zone is spreading beyond Greece and Ireland and now threatens Portugal and Spain according to many stories by the Main St. media outlets. The Dow Futures have been down about 100 points this morning in pre-market and the Euro countries markets are down about 1.5% on average today.

Many like CNBC are hyping the Black Friday Shopping spree, which is the greatest marketing vehicle in America. With all the hype about "shoppers are spending" they hope to entice those weak of mind and discipline to get out there and "help America". Bah Humbug, I say. I'm all for buying gifts for family and others as the next person. I just think the best way to help Americans right now is to help the less fortunate. And those folks are the ones who have been unemployed for 99 weeks or longer. You want to help America? Hire one! Call your Senator and Congressman and have them pass another extension in Unemployment benefits for them. Or you could take in a person who is living on the street and help them get on their feet. Or you can volunteer at a shelter or donate Food to the Food bank in your local community. These are the best things you can do right now. And you can have the courage to disagree with those who say these folks are freeloaders, even if they work with you or live in your neighborhood. Some of us need to stand up to those who have to understand the plight of those who don't have. That's what America used to be like. But it seems in this continual season of partisanship, that has been lost too. And don't blame the victims!

I feel better now. A good rant clears the throat! Now listen to this You Tube video of what's happening over in Europe with this debt issue as one politician "clears his throat" too. You don't hear this in our Congress, but you should!

Market commentary Oct. 5th (UPDATE)

There has been little news to comment on with respect to Economic data released this week. Yesterday, Factory Orders for August came in down -0.5%, compared to +0.5% in July. July's data was revised up from +0.1% to +0.5%, so the orders are down.

The stock market closed down yesterday, with the Dow closing down -79 points. Again, within a half hour of the close, it was down -95 points but then the Volume surged in the last 15 minutes to end the day only -79 points. Volume spiked about 30-40 million shares in the final 15 minutes. Now the Futures market today is up +70 points on the Dow. So it appears that the Bulls are recouping yesterday's loss.

The charts look the same. On all indexes they are completing the right shoulder of a Head and Shoulders pattern, so until it does, this market will stay up and still may go to the high of 11,200 on the Dow, as I predicted on Sept. 21st.

The big news of the week will be Thursday with Initial Jobless Claims and Consumer Credit and on Friday with the Unemployment report for the month of September. Also on Friday, Hourly Earnings, Wholesale Inventories for Aug. and Non Farm Payrolls.

UPDATE 7:00am PST

The ISM Services data for Sept. was released and came in at 53.2, while expectations were for 51.0. The prior month data was 51.5.

Market comments for Sept. 23rd (UPDATE)

Initial jobless claims were announced this morning. Expectations were for 440K claims and the number came in at 465K, so it was 25K higher than expected. The prior week's data was also revised up from 450K to 453K. Dow Futures dropped immediately from being down about -60 points to now being down -80 points.

Continuing Claims came in at 4.489 Million versus an expectation of 4.450 Million. This too was more than expected. The prior week's data was revised upward from 4.485 Million to 4.589 Million Continuing Claims.

Many of the Indexes have a Sell Confirmed reading from American Bulls from yesterday's close, such as the Nasdaq Composite, SP500, NYSE, Russell 2000, and others. The Dow Industrials had a Sell-If signal posted.

Gold is up 17.8% YTD and that is higher than most investments this year.

AT 7:00AM PST, Existing Home sales will be announced and updated here, as well as Leading Indicators. And tomorrow Durable Goods Orders will be released and New Home Sales.

UPDATE:
Existing Home Sales for August came in at 4.13 Million Homes. Expectations were for 3.80 Million Homes sold. The prior month of July's data was revised up from 3.83 Million to 3.84 Million.

Leading Indicators for August data was also released. It came in at +0.3% versus an expectation of +0.1%. The prior month of July, the data was +0.1%.

Market comments for Sept.16th (UPDATE)

Initial Jobless Claims came in at 450K and expectations were for 440K. That was a little more than expected. The prior week number was 451K but here again, it was revised up to 453K. The number is still basically the same, week after week, so the jobless picture is not getting better, but also at this period of time isn't getting worse either. That is good news for those employed, but bad news for the long term unemployed, as it is still very difficult to get a job.

Continuing Claims came in at 4.485 Million. Expectations were for 4.450 Million. The prior week's number was 4.478 Million but was revised upward today to 4.569 Million. Again a more negative number than previously reported. You would think with all these revisions over the past months that sometime they would revise them downward, but they don't. That is part of the reason why I believe the numbers are being deliberately manipulated.

PPI numbers released for August were +0.4%. The prior month of July it came in at +0.2%. Expectations were for +0.1%. Core PPI came in at +0.1% compared to prior month's data of 0.3%.

The Futures market is still negative with Dow Futures down about 42 and the S&P 500 down about 6 points.

FedEx sees 1Q profit double, and you would think that is good news. However, they said that the Global recovery isn't as strong as was previously reported by them. Also, in the announcement, they said they are going to layoff 1700 jobs. Read the entire story here.

Other news, which caught my eye this morning was that foreclosures are up 25% on the year. The increase in foreclosures came even as the number of properties entering the foreclosure process slowed. To read the complete article click here.

I know what you are thinking right now. Where is the market going? If it were based on the data, it should be down much lower than where we are now. But it doesn't seem to be following that course of late. It doesn't make sense to me that the market has been rising this past 2 weeks, but it has. So your guess is as good as anyone's right now. You decide!

The next data out will be at 7:00am PST and it will be the Philly Fed data. Last month the number came in at -7.7, which surprised many. Initially expectations were that the number would come in today at +2.0, but since the expectation was lowered to 0.0, so we will see what actually it come sin at. Come back and I will post it below, just after 7:00am PST, with the word UPDATE, added in the title of this post.

UPDATE 7:30am PST

The Philly Fed data came in lower than expected at -0.2, which drove the market lower. The day is setting up as a Hammer Candlestick pattern, which usually means that the trend has been broken and it shall now drive lower in coming days of trading. Trading volume is still very low, relatively speaking.

Market comments for Sept. 8th

The Dow fell about 107 points yesterday, but the more important piece of data was that the Put to Call ratio closed at 1.33. a level not seen since May 20 and 21st when the stock market lost over 400 points. Back then the struggle was for the Dow to stay over 10,000 in the short term. It failed and began the Dow's drop to 9800 at that time. Now we are at a similar place with the Dow closing yesterday at 10340, while starting the day at 10,446. Back on May 20th, the Dow was at 10,440 and closed at 10,068 and was the start of the decent to 9686 on July 2nd.

In pre-market today the market is pointed up as the Dow Futures are up 26 points and the S&P is up about 3 points. The Nikkei reacted to our market from yesterday and was down about 200 points in overnight trading. European markets are up about 20 points at this hour. It isn't a strong upward signal as they await our markets to open. 10 days before Options Expire for September.

Not much important forward looking data will be released today but there is some data. At 7:30am PST Crude Inventories will be released. Then at 11:00am PST notes from the last Fed meeting will be announced called the Beige Book. And at Noon, Consumer Credit will be reported. This will tell us if the Consumer is paying down debt or has stopped and started to spend. This is looking backwards as the data is for July and it is expected to come in at -5.5 Billion. To put this in perspective June came in at -1.3 Billion. So this indeed expects the Consumer to be paying off more debt and therefore taking more money out of play in stimulating our economy. Markets rarely move on this data but in this volatile market it is difficult to predict the direction of the reaction.

Market comments for Aug. 12th. Initial Claims disappoint!

Initial Jobless Claims for the week came in at 484,000. This was again in the wrong direction for a recovery. Last week Initial Jobless Claims came in at 479,000 while only 460,000 were expected that week. This week they were expecting only 465,000 Initial Jobless Claims. And 3 weeks ago the Initial Jobless Claims came in at 457,000 so you can see the trend of Increasing Claims.

The Futures market dropped on most Indexes as the Dow is now at -70. This is not encouraging for those Long the market. It doesn't look like a snapback from yesterday's lows is imminent.

Tomorrow the CPI and Core CPI data will be released for July as will Retail Sales numbers and the Michigan Sentiment data. Be sure to come back here and not only see the data but to get my commentary.

Now a look at the chart of the Dow. You will notice that yesterday's drop of 267 points had the Dow go below the 200 day Moving Average. The same is true for the S&P 500 chart. Also notice that the Volume has picked up each day this week and yesterdays went above the average long trend volume. So the day was a significant Distribution day. Expect this downtrend to continue today with the news on the Initial Jobless Claims. The Hammer pattern discussed in the earlier post of Aug. 5th came through as a predictor of yesterdays' drop. It is worth the time to follow those Candlestick patterns.

Market comments for Aug. 11th: Reality is about to catch up!

The Futures market shows the Dow down 126 in pre-market and the European markets down 1.5% or more. The reality of the recent economic data appears to be catching up to the reality of the hefty prices in the stock market and company valuations. The warning bell has been rung many times over th past 3 months and the rings are getting louder. Oil has broken below $80/barrel for the first time in a while. Then Yen is now down to under 85 to the dollar. Top line Revenue growth has not been the fuel of this past quarters earnings achievement. It has been cost cutting. But that too may be near its end as well as Unit Labor Costs are starting to rise, reported yesterday at +0.2%, and Productivity is starting to wane, reported yesterday at -0.9%. The Trade Balance for June has come in at -$49.9 Billion while it was expected to come in at -$43.0 Billion. The prior month it came in at $42.3 Billion. So this is definitely not going in a good direction. Gold is up over $10/ounce this morning. Exports were down -1.3% and Imports were up 3.0%.

We also expect Initial Jobless Claims to rise again this week. The number expected tomorrow is 465,000 compared to the previous week's expectation of 460,000 but actually came in at 479,000. And on Friday CPI and Core CPI numbers are reported, as well as Retail Sales and the Michigan Sentiment index. So much more news to come this week.

S&P Futures down -16 in premarket and the Nasdaq Futures are down -30. It looks like we may be finally merging reality with the value of the stock market. We are going lower.

Market comments for Aug. 10th (Update)

Economic data released this morning showed Q2 Productivity was the lowest since Q4 of 2008. It came in at -0.9%. Expectations were for +0.1%. Unit Labor Costs rose slightly +0.2%. Expectations were for them to rise 1.3%. Later this morning, data for Wholesale prices will be released. Expectations are Wholesale prices will be at 0.0% gain. I expect it to go negative, showing deflation but 0% is still amazing when you think about it.

Then the big item today is the FOMC will be releasing its rate decision and comments at 2:00pm EST or 11:00am PST., which is being anticipated with some anxiety. People want to know how the Fed will react to deflation and whether there will be more easing of Interest rates. Will the Printing Presses roar printing new money faster than it can be used. The worry had been Inflation but there appears that is not what the Fed is now concerned about. It's Deflation, just like in the 1930's.

Futures are down 105 points on the Dow.

UPDATE: 9:15AM PST

Above is the chart from Haver Analytics of Unit Labor Costs. Trend is pretty bad indeed. Looks like another piece of data showing deflationary times ahead to me

Market comments for Aug. 6th

The unemployment numbers released this morning were very disappointing for anyone who cares about the economy and for the people who lost their jobs. Here's a rundown of the data. The most surprising data was Non-Farm Payrolls. The number expected was that they would be down originally about -87,000 and then they revised the expectation downward yet again to -100,000 but the number came in down even further at -131,000. Now that was bad enough, but they also revised last months from being down -125,000 to being down now -221,000, which is a more bleak picture than we had before the data. These are all hard working Americans who lost their jobs, who have families to care for. The Unemployment rate stayed at 9.5%, which didn't make sense as all expected it to go up to 9.6%, but it didn't so you wonder if there is any manipulation going on here.

The Unemployment report is the most important report in a Month and the accompanying Non-Farm Payroll report. The other indicator worth commenting on today is Consumer Credit. It is expected to be down -$5.0 Billion dollars, but the number doesn't come out until 3:00pm EST today.

The Dow Futures are down about -90 and Fair Value was in the positive, so expect the market to be down about -100 around the open this morning.

We have had a hammer pattern 2 days ago on the S&P 500 which said we were going to reverse direction and go down so today plays out that reversal. Also, if you go to the AmericanBulls.com web site you will notice all major indicators are identified as Sell-If ratings based upon their Candlestick patterns. The sell decision is based at the open and if there is a gap from the close yesterday. Indeed all will have that today so the Sell decision is confirmed.

Market outlook for Aug. 5th: Still bound by upper resistance levels!

Initial Jobless Claims rose unexpectedly to 479,000 this week compared to an expectation of 450,000. Continuing Claims came in at 4.537 Million, while expectations were of 4.500 Million. Before the numbers were released the Dow Futures were up 10 points and after the number the Futures were down -28 points with Fair Value up 3 points. The Initial Jobless Claims are at the highest level since April. This should have an impact on the markets and has already on European markets going lower than they were. But you never know in this market whether people will just shrug off the news as they have in the past. Why the market is still as high as it is is still confounding because the data is pointing very strongly that we are in a Deflation period which is accelerating.

The chart of the S&P 500 above shows that on Tuesday we formed a Hammer Pattern. This pattern marks a reverse in the previous trend. While yesterday's closing was not down, today's should be to fulfill the Hammer pattern reversal. Watch the S&P 500 today as it should lead the market over the Dow, which often gives confusing signals, because there aren't many stocks in the Dow Index and fewer stocks can be manipulated more easily.

The chart above from Haver Analytics was last updated on July 29th, so it doesn't include this week's data but as you can see 479,000 is clearly a trend in the wrong direction and alarming to many, especially the long term unemployed, often referred to as the 99ers. Those are individuals out of work longer than 99 weeks and get no benefits currently and are living on a string, as an article on the front page of the NY Times said on Tuesday, describing a 49 year old woman who moved out of NY with only a few hundred dollars and drove to Brattleboro, VT and plans to live in her car and try and find some work.

Revisions to the previous week's data were made from 457,000 to 460,000 Initial Claims. Tomorrow the Unemployment rate for July will be released and it was already expected to rise to 9.6% from 9.5%, but with these Initial Claims rising steadily, it could go back up to 9.7% or higher.

Stay tuned and return during today's market action for any Updates which will be posted below.

Market outlook for July 20th: Rainy with Clouds

Well after the bell yesterday, IBM reported its earnings as did Texas Instruments. Both disappointed on top line Revenue expectations and that has set the stage for today's market action. Futures are down and Europe is down this morning. Also out this morning was Housing Starts and Building Permits. The news there was mixed. Housing starts came in at 549K for June compared to an expectation of 575K, which was worse than expected, and Building Permits came in at 586K compared to the expectation of 572K, which was better news than expected. That rallied the Futures a bit so they weren't as negative before the news came out Dow Futures were down about 100 before the Housing data, but after the data they came in at down only 75. However, currently the Dow Futures have slipped back down 93.

Expect today to show another leg down on this slowly unwinding market. I will post Updates here during the day today. So if you have read this once be sure to come back and see the Updates and commentary.

Also, news on Goldman Sachs missing expectations on their numbers also is causing some market turmoil. It is clear that the top line Revenue Growth is not there and the only way companies are making their earnings is but cutting costs. It isn't going to get better any time soon according to Pimco's Mohamed El-Erian, CEO and Co CIO who was on CNBC this morning.

I will also post today something on Silver and ZSL and that there is about to be a significant break below key supports on Silver and that this can be payed by buying ZSL or adding to previous positions. Look for tha post later this morning.

UPDATE: 9:45am PST

AS you can see from the above chart we started down about 125 for the Dow but have steadily risen up in spite of the news. Well the Dow formed a "W" pattern with the slant pointing down. We therefore should go lower from below the lowest leg of the "W" pattern. That would take us to Dow down over 100 again today.

Pre-market outlook Jan. 15th 2009: Market Indexes will drop again today

Lots of news this morning and I will try to state major items of interest affecting your portfolio. The net effect of the news is that today will be another down day for U.S. markets. Here's the summary:

- Jamie Dimon of JP Morgan says worst is yet to come in the financial crisis
- Microsoft is seriously considering layoffs
- Motorola is looking at more cost cuts in 2009 including cutting 4,000 jobs
- The Eu Central Bank has lowered interest rates 50 basis points to a rate of 2%
- Russia has devalued its currency for the 4th time in 5 days.
- Nissan to reduce US Mfg. Plants to a 4 day work week

You can do a search on any of these items today and get the detailed news story.

I looked for some good news today but couldn't find any. The effect on the stock market futures is predictable with Dow Futures dropping over the past hour and the Nasdaq Futures were hit by the Apple news as well as the fact that Microsoft considering layoffs.

I would still hold on to the ETF Ultra Shorts SDS and TZA but by tomorrow the market may be down enough that selling some of your shares from your positions could be warranted. Currently SDS is at $81.30 in pre-market and TZA is currently at $61.49. I am still thinking these shares will rise substantially. If they don't rise enough by tomorrow I will still hold all shares. The reasoning there is that on the day of Barack Obama's Inauguration the markets may rise from the optimism of a new President and it may linger some days next week. However when reality sets in we are headed down to retest the lows and that is where you will want to sell these two ETF's.

Depending on the severity of the drop in Apple stock, symbol AAPL, I may add to my position again in the coming days.