Home > Uncategorized > Brief Update: 2010/01/28: Political Influences Abating Saw Equities Buoyant In Spite Of Weak Economics

Brief Update: 2010/01/28: Political Influences Abating Saw Equities Buoyant In Spite Of Weak Economics

▪  And a goodly portion of the extremely troubling influences which burdened equities late last week was the “throw the Bernanke out with the bathwater” mentality that arose in the wake of the Democrats’ loss of the late Teddy Kennedy’s Massachusetts Senate seat. While our regular readers know we’re not necessarily big fans of the Fed Chairman, even we feel that Congress is enlightened enough to not toss the captain overboard while our leaky economic boat attempts to limp into safe harbor.

▪  Which led us all to the major ‘politico’ influence yesterday: Mr. Obama’s State of the Union Address, in all of its stubborn left-of-center glory.  A lot of contradiction in the equities response: is the economic impact of the request for a ‘jobs bill’ (i.e. further stimulus package) something the equities relish; or more so that it is such a wholly contradictory initiative in the immediate wake of the President’s demand for a spending freeze that the markets know it’s not something any of his fellow Democrats can’t even begin to support? 

▪  As noted previous, equities serial technical failures are now obvious. They also span many variations from March NASDAQ 100 future failure on retests of its 1,890-93 key topping action from two weeks ago, right into the recently more resilient DJIA looking tired on its 10,600 area UP Break from a very rare Flat Bottom Widening Pattern.  As noted previous, the March NASDAQ 100 future failure below the 1,850 area was likely to lead to the test we have now seen of significant supports in the low 1,800 area that extends to the currently critical 1,782 major Fibonacci 0.618 retracement overrun on the way up.

▪  As a reminder, speaking of selloff lows from late last year, last year’s Closing prices are also relevant as we head toward tomorrow’s end of January regarding the notorious January Effect: the tendency of January’s direction to set the tone for at least the first part of the year. DJIA: 10,428; S&P 500 future: 1,110.00; NASDAQ 100 future: 1858.75. 

▪  All of which is still relevant counterpoint into all the other asset classes…

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