Monday’s Trading – 2/1/10

On the morning of January 11th, I wrote:

“The SPX’s 200-month moving average is at 1156, which is also the top of the Box of Beer. That confluence should provide some sort of resistance.”

As it turned out, it was lethal resistance, and now another important moving average is coming up. The SPX made a brief bounce at its 20-week MA before falling through. Now it as approaching its 100-week MA, which is at 1060.38.

The charts are a horror scene without the slightest sign of even a fledgling bottoming pattern. If the market can’t hold inside the November 9th gap, where it is now, a trip down to the 100-week MA seems likely. If the bulls can’t circle the wagons there, then the next rung in hell is the November 6th gap at 1046.50.

If the market can’t stabilize on prospects for a positive jobs report on Friday, that would be a rather bearish omen.

Cloud Schmoud

Oracle CEO Larry Ellison mocks “cloud computing” and rightly so:

In my control panel for, there is a link for cloud computing. When I clicked on it, it took me to a set-up screen for virtual machines. OK, I suppose you can call a virtual machine a cloud if you want, but virtual machines are nothing new. I saw my first VM over 20 years ago. It ran Windows on the Macintosh – very, very slowly.

Friday’s Trading – 1/29/10

On Thursday, the SPX closed at 1084.53, which is only 0.27 points off of the threshold of the Box of Beer (1084.80). How’s that for accuracy? The Fibonacci analysis that I did four months ago determined that to be a key level, and so it has been.

If the SPX can’t hold in the Box of Beer, it will fall back into the Box of Bulls where the first substantial support level is 1068.11. And, as befits an important Fibonacci level, there is a large unfilled gap right there. That gap opened on the morning of November 9th, and the market never even came close to filling it. This is the gap that George has been showing on his weekly charts.

For SPY, the gap is between 107.16 and 107.87, and it’s a fat, juicy target for this sell-off. If the market does indeed dive down there, it should find some sort of support. How long it lasts is another question.

Also, I think there is a decent chance that next Friday’s jobs report might show that the economy created a few jobs in January. Let’s see what Bloomberg’s survey of economists shows on Sunday.

Thursday’s Trading – 1/28/10

The USO closed below its 200-day moving average for the first time since July 30th. Sagging oil doesn’t say much for the strength of the recovery.

The iPad had better not be another Newton or AppleTV. If it doesn’t sell well, Steve Jobs will rue the day he called it a “magical device”. In fact, people will call it the “tragical device”, to coin a phrase. You heard it here first. Google “tragical device” and see for yourself.

Of course, the way netbooks sell, it looks like the iPad will be a winner. So nobody will use my phrase – at least not on the iPad. Maybe on that Google phone…or the Kindle.

Wednesday’s Trading – 1/27/10

Fall Guy
Somebody’s got to be the fall guy for Massachusetts, right? For a while there, it looked like it was going to be Bernanke, but he seems to have acquired enough votes to get re-confirmed. So now it’s Timmy Geithner’s turn on the chopping block for the AIG Bailout scandal.

And that means that we now have four mega-events for the day:

10:00am AIG Hearings/Geithner Execution
1:00pm Apple Product Announcement
2:15pm FOMC Announcement
9:00pm State of the Union Speech

At least one of these should provide some fireworks for the market.