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.

137 Responses to “Friday’s Trading – 1/29/10”

  1. K says:

    George,
    its as much of a resource hog as checking your email ;)

    aka its web based.

    http://www.youtube.com/watch?v=PvKFP67GwSY

  2. Randall says:

    I thought Mauldins article was a good read, esp. about the Greek debt crisis and the prospects for the Euro. The title is also good.

    http://www.businessinsider.com/we-are-so-screwed-2010-1

    Maybe its just me, but I had a real sinking feeling watching the O-bomb give the SOTU address – a kept saying to myself “wow – this is just a den of dressed up, overstuffed, self-serving thieves cheering on their ring leader” – and, of course, “we are so screwed”. Its like we are in the midst of one huge economic experiment – the best case being limp along capitalism and the worse case – a 1930’s style depression with mass riots, looting and anarchy.

    O-bomb now says cutting deficits is as important as the unemployment issue??? Govt spending not getting the “job” done??? What a surprise.

    When we lose confidence in our leaders and those running our most important institutions, corporations and biggest banks (or worse, we see them as the enemy…), the system is not far from total collapse…

  3. K says:

    George,
    Some interesting things on Failed banks so far this year… averaging higher than last year

    http://www.calculatedriskblog.com/2010/01/fdic-bank-failure-update.html?

  4. paula says:

    George and K,
    I guess I’m not with it. But when I read a book, I
    want the book in my hands…not some electronic
    device. I love book stores. Hope they never go
    out of business.

  5. K says:

    Paula,
    I have a book reader and i did read a few books with it.
    Its great when you have a 1000 page book that you don’t want to carry.

    I bought this way when it was ~$199 or maybe less.
    http://www.newegg.com/Product/Product.aspx?Item=N82E16858723001

    its a knockoff but i dont really care as now its sitting like most other gadgets that get no use.

    I will use it again since i have a lot of pdf books and documents that i would rather not print but if i have a physical book 400 pages or less i would rather read the physical book. if its 1168 pages Atlas Shrugged I would prefer book reader.

  6. paula says:

    K,
    Good points. But I love my “Atlas Shrugged” book…
    …have underlines on many pages…got mad once
    and tore out a page…still read it from time-to-time.

  7. K says:

    Paula,
    you have brinks trucks going home.

    but imagine most people going to work on the T.

    having a 1000 page book to carry around is a burden.

    women can get away with it since they have their bags but us men dont like carrying around big things

    here is an example http://www.utne.com/uploadedImages/utne/blogs/Politics/Atlas-Shrugged-reader.jpg

    now same example sorta but with a kindle (aka ipad competitor)
    http://farm3.static.flickr.com/2602/3904372489_259811e794.jpg

    sure i love physical books but when convenience comes in its no good. Most of use dont have time to read books when we come home from work at 6pm. so we read on the 1hr commute to and 1hr commute from work.

    :) I know you appreciate my point of view and keep in mind.. i am a tech lover but dont find book readers as useful as many other things.. prehistoric look i guess… except ipad but too expensive.

  8. K says:

    WASHINGTON – As the Obama administration edges toward imposing tougher sanctions on Iran, it has begun upgrading its approach to defending its Persian Gulf allies against potential Iranian missile strikes, officials said Saturday.

    The United States has quietly increased the capability of land-based Patriot defensive missiles in several Gulf Arab nations, and one military official said the Navy is beefing up the presence of ships capable of knocking down hostile missiles in flight.

  9. paula says:

    K,
    More good points. You win.

  10. paula says:

    I’m not into bonds, but a friend of mine who
    trades them tells me to look for a big price
    drop.
    K- If this happens, what does it mean for
    the market?

  11. paula says:

    K,
    One last thought before I call it a nite. You
    are telling me that you would rather carry
    around an electronic device than a book.

  12. K says:

    yes i would Paula, only if my trip is less than 10 hours or if the book is more than 400 pages.

    I’m not into bonds either, phil is our man there.

  13. Larry says:

    S&P500 P/E ratios and earnings estimates. From Decisionpoint:

    http://www.decisionpoint.com/TAC/SWENLIN.html

  14. 2thfixr says:

    Paula, simply put until Phil can answer:

    If prices of bonds drop, the yield goes up. If price goes up, yields drop.

    Think of it this way: when traders want to park their cash in bonds, they bid UP the price because they are more in demand, and therefore the yield drops (they are willing to accept less return in interest for the perceived safety). When they remove their capital, prices DROP as they sell the bonds (less demand) and yields go up in order to entice more buyers to buy them.

    One wrinkle….as the stock market goes down, many money managers will be BUYING bonds driving price up and driving yields lower. As Daneric’s charts show (page 1), during the crash of 2008-2009, bond prices skyrocketed (remember how 10 year yields got near 2%?). The same could happen, especially if the dollar appreciates. Hope this helps, but Phil is the man. Listen to him.

  15. George says:

    Have I missed the “Older/Newer” comments tab? Nice feature Matt.

  16. George says:

    As far as the electronic book reader, it’s like everything else, it has its place.

    I bet today’s school kids would like an electronic method of replacing all of those books. I see kids going to school today with enough packs and satchels to qualify them with soldier status. When I went to school, there was no need for backpacks. Everything we needed was under the seat of our desk. If we had homework we would take the related book home that contained the assignment. As I recall, I had very little homework compared to today’s assignments.

    On the iPhone, there are apps that will read content for ya.

    Anyway, I like my Atlas Shrugged in book form but I wouldn’t shy away from getting it in electronic media. That being said, I don’t like the bulky devices that are out now. Maybe if they were paperback size. Even then, they wouldn’t fit in a shirt pocket which is good enough.

    Besides, I’ve never seen a paper book that needed batteries. That is a constant chore with electronic devices – like changing a baby every few hours.

    …just sayin’

  17. admin says:

    Bloomberg’s survey is out, and as I suspected (see my last paragraph up at the top), economists are forecasting a +13,000 number for Friday’s jobs report:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=ahyNMIouz_uY&pos=1

    Of course, due to population growth, a +13,000 number means that our jobs deficit has increased by 87,000 jobs or so.

  18. admin says:

    George,

    The older-comments link only appears when there is a long list of comments. So, most of the time it’s not there.

    Matt

  19. George says:

    I’m almost finished with my construction contractors. They have no other jobs lined up. They are looking at low unemployment areas like Houston to get jobs. They will move there of course, there’s no other alternative.

    BTW, I have a guy that has a doctorate degree cleaning and painting one of my homes. He’s a web guy and that area has dried up for now.

    Generally, the technology field beefs up when the economy is bad – not this time.

  20. George says:

    Matt, I see.. that’s a good feature, especially with an iPhone, because it reduces the scrolling considerably.

  21. George says:

    K,

    I need tech advice. I installed XP over ME. I didn’t reformat. It is now sucking up 6.7GB of a 10GB drive. I can’t see where the spaces is being used up. There are only a few user files. I haven’t run across this problem before. Everything works great, just not enough space remaining it XP only takes up about 1GB.

    I rebuild old PCs, load learning/fun games on them and give them to kids that don’t have one. The games are about 2GB.

    Any ideas? Thanks.

  22. K says:

    George, XP takes ~2GB usually + 2GB games = 4-5 GB right there. I am suspecting either ME had a secret partition for recovery or the files are hiding.

    Honestly I have only encountered windows ME twice in my tech life and i couldn’t get anything done with it so i reformatted.

    just curious, is it XP pro or Home? (doesnt make much of a difference but curiosity)

    May I ask why you installed on top of sticks instead of concrete? :D

  23. George says:

    K,

    XP Home. I thought I would try overlaying ME to save time. Now it will take longer. :)

    I’ll look for that partition. I hadn’t thought about that. Perhaps a recovery position.

    Thanks

  24. K says:

    you can send the check my way or just buy me one OEF share :D

  25. George says:

    You mean one share of OEF short?

    BBT daily in a stochastic uptrend.

  26. Yerk says:

    George, my XP c:\windows folder is 5.5GB so all these stupid updates eat up quite some space. And I’ve disabled these system breakpoints and whatever.

    Do a search with *.* and sort by size to find the fat ones.

  27. K says:

    Yeah yerk is right… i just checked mine and it’s 5.5GB. I Use windows 7 so couldn’t check but saw the other computer.
    Maybe you just need to find a 20GB+ hard drive :)

    in other news I applied to the Street of State (read from right to left lol)

  28. K says:

    one more POW POW BAAAM!!!

    http://www.youtube.com/watch?v=qY8kOmipKQY

    Geithner GOOOOOOOOOOO HOME

  29. K says:

    for those with plenty on time that care to see there guys being grilled (although i doubt many) http://www.c-spanarchives.org/browse?event=181757

    C-span archives look awesome. i need to figure out how to watch this on my google chrome though haha

  30. K says:

    you need real player for cspan. pfff i’ll pass.

    RealVideo Links To Be Retired on March 1, 2010

    Due to lack of demand for the RealVideo format, we will be retiring our links to C-SPAN live video streams in the RealVideo format effective March 1, 2010.

    LOL :)

  31. George says:

    5gb? Good grief. I didn’t realize XP took that much. So it may be as good as it’s gonna get.

  32. K says:

    Yeah, it should be fine for the purposes that you stated :)

    so nice of you.

  33. K says:

    finviz came out with a new tab called futures…

    http://finviz.com/futures.ashx

    very nice and visual look of how the futures markets are doing.

  34. 2thfixr says:

    George, are you looking for an older hard drive (80 pin ATA type, I assume)? I may have one laying around that I would be happy to ship your way. I’ve got a 20GB drive sitting right here on my desk as we speak that hasn’t been used in years. Would it help?

  35. 2thfixr says:

    K, that is a cool futures site! Thanks for sharing.