January 27, 2009

Market Review and Commentary for January 27, 2009

DISCLAIMER: These are trades I am doing and may not be right for
you. Use your own Due Diligence when making financial decisions of
your own choosing. This is NOT a recommendation of any security.
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The DOW, S&P and NASDAQ all advanced higher again today.

I have a number of short positions in SPY, BBBY, GS, JNPR, MO, AMZN and AZO.

I also have several thousand shares of UYG which I have been accumulating anytime it falls under $3.

The market was extremely volatile again today as shown in my Volume indicator:

The DOW is also in a Triangle pattern:

However, after the close of the market today, the Obama Administration announced a “Bad Bank/Good Bank” solution to the financial crisis.

What this means is that a newly created government type of ‘Bank’ will be created to take over the toxic assets of the troubled banks and leave the troubled banks (Citi, BofA, etc) to continue to operate sans the bad assets thereby insulating them from further write-downs.

The S&P500 futures were trading +11.00 after the close on this news. I expect the DOW will probably hit our 8370 (874 on the S&P500) target on the DOW for the short term rally I suggested we would see.

Watch carefully if the market sells-off hard on this new plan.

Just to demonstrate how sick investors have become (or complacent) of bad news, they are now celebrating HUGE losses. Yep, losses are now GOOD news:

Yahoo LOST $303 Million in the 4th quarter but it’s not as bad as expected, which, in this environment, is cause for giddyness. If that isn’t crazy, I don’t know what is.

This market will be going lower again very soon.

THERE’S NO VIDEO REVIEW TODAY

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