StreetSmartPost

Thursday, February 25, 2010. 9:15 am.

I recently remarked about the SEC’s pending vote this week on how to respond to Congressional pressure to do something about regulating short-selling, and public demands that the previous ‘uptick rule’ be re-instated.

I noted that the SEC had requested public comments. The resulting comments to the SEC from banks and Wall Street firms were that no regulations are required on short-selling, while public investors demanded something be done, preferably re-instatement of the ‘uptick rule’ (which had been imposed in regulations of financial firms that took place in the 1930’s, but was repealed in 2007).

The Fed’s decision yesterday was to impose a ‘circuit breaker’ on short sales. On any day that a stock moves down 10%, no more short-selling in that stock would be allowed for the rest of that day, and the following day. Presumably the short-selling on that stock could resume the third day.

If I understand that correctly, could it be any more useless as a regulation? It would still take only minutes for short-sellers to drive a stock down 10%, but to drive it down 20% would take them 3 days?

But it will sound like the SEC being tough with a new regulation.

As I said in my newspaper column, the talk of supposed coming re-regulation of Wall Street will turn out to be mostly talk once investors calm down from their current anger against financial firms.

Yesterday in the U.S. Market.

It was all to the upside, with the market closing close to its high of the day.

Yesterday’s intraday chart:

The Dow closed up 91 points, or 0.9%. The S&P 500 closed up 1.0%. The NYSE Composite closed up 0.8%. The Nasdaq closed up 1.0%. The Russell 2000 closed up 0.8%. The DJ Transportation Avg. closed up 0.7%.

SUBSCRIBERS: There is an in-depth intermediate to longer-term Markets Signals and Recommendations Report on your website and a hotline update from last evening.

And there will be a new ‘Gold, Bonds, Dollar, Inflation Report’ on your website today.

Asian markets were mostly down last night.

Asian markets ignored the U.S. rally of yesterday, closing down, with the exception of China.

The DJ Asia-Pacific Index closed down 0.7%.

Among individual countries:

Australia closed down 1.1%. China closed up 1.3%. Hong Kong closed down 0.3%. India closed down 0.1%. Indonesia closed down 1.2%. Japan closed down 0.9%. Singapore closed down 0.5%. South Korea closed down 1.6%. Taiwan closed down 1.4%.

If you’d like to see a three-month chart of these indexes and others, click here, and then click on any of the markets in the list at the left side of the page it takes you to.

Markets this Morning.

European markets are down on average of more than 1/2%.

Oil is down $1.43 a barrel at $78.56.

Gold is down $6 an ounce at $1,091.

Markets in the U.S.

In the U.S., important economic reports continue to come out this week, including consumer confidence, new home sales, existing home sales, etc.

To see the full schedule of the week’s reports click here, and look at the left side of the page it takes you to.

Tuesday’s report that the Conference Board’s Consumer Confidence Index plunged sharply to 46 in February from 56.5 in January spooked the markets, as another sign that economic growth may falter over coming quarters.

Yesterday’s equally negative report that New Home Sales plunged 11% in January was ignored by the market, which seemed focused on Ben Bernanke’s testimony before Congress.

This morning it was reported that Durable Goods Orders were up an unexpected 3% in January. However, it was all due to long-range orders for aircraft. Ex the big aircraft orders, durable goods orders fell 0.6%.

And the Labor Department reported that unemployment claims were up 22,000 last week. The consensus forecast was that claims would decline.

The reports added additional weakness to already negative pre-open indicators.

Our pre-open indicators are very negative, pointing to the Dow being down 135 points or so in the early going.

Stock Market Patterns.

This is the week after the month’s options expirations, and tends to be negative, particularly when the options expirations week was more positive than usual.

Interesting Charts of the Morning.

I’m sorry but I don’t have time to include interesting charts this morning.

Please scroll down to see other recent ‘Interesting Charts of the Morning’ and commentary.

To read my newspaper column from last weekend ‘Why Talk of Re-Regulation of Wall Street is Just Talk!’ click here!

SUBSCRIBERS: There is an in-depth intermediate to longer-term Markets Signals and Recommendations Report on your website and a hotline update from last evening.

And there will be a new ‘Gold, Bonds, Dollar, Inflation Report’ on your website today.

Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term signals and market moves that are most important to investors. So, please consider a subscription to our independent research and recommendations. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?

Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

Wednesday, February 24, 2010. 9:15 am.

The Federal Deposit Insurance Corp reports that at the end of the December quarter there were 702 banks on its ‘troubled banks’ list. That was a big increase from 552 that were on the list at the end of the third quarter, and the highest number since 1993 (at the tail end of the S&L and banking collapse of the early 1990’s).

Last year 140 banks failed and were taken over by the FDIC. Banking analysts have been estimating that 500 to 700 banks will fail over the next few years. It’s looking like they were right.

The FDIC report comes just two weeks after the bi-partisan Congressional Oversight Panel released a 183 page report that says 2,988 small U.S. banks are about to “get hit by a tidal wave of commercial-real estate loan failures”. That’s approximately 38% of the 8,000 banks in the U.S.

Concerns about commercial loan losses being the next shoe to drop have been growing for a number of months. The panel used information provided by the Federal Reserve, the Comptroller of the Currency, and the Federal Deposit Insurance Corp (FDIC).

The potential problems for the economy are not just the losses for the financial institutions and their stock-holders, but banks could be forced to cut back even further on the already tight availability of commercial loans needed to sustain the economic recovery.

Speaking of which:

U.S. bank lending plunged to lowest level since 1942!

In the same report, the FDIC says banks turned in their biggest decline in total loans in 67 years for 2009. The report said the decline in loans showed up in all types of loans except credit cards. That is, in home mortgages, commercial loans, and construction loans. The FDIC says the problems are most pressing in the banks that already have high levels of bad loans on their books. Banks claim a big part of the problem is that there are few applicants with the necessary credit quality due to the effect of the recession on small businesses and consumers. Banks wrote off $53 billion in loan losses in the December quarter, the largest amount in the 26 years the FDIC has been compiling the data.

The FDIC explained that commercial real-estate loans take longer to go into default than home mortgages, and so will continue after the economy has recovered.

Home price declines vary wildly!

The Case-Shiller Home Price Index, based on its measurements of home prices in 20 cities across the country, seems to move only single-digit percent points one way or the other.

However, in some areas including Las Vegas, Florida, Georgia, etc., where overbuilding got out of control in the boom years, the prices changes have been jaw-dropping.

Want to buy a condo in central Florida in an upper class, gated, golf community for just $62,925, down from $312,000 in 2008? How about a lot in an exclusive area in a previous ‘Street of Dreams Showcase’ where house lots sold for $360,000 in 2004, soared to more than $1 million in 2006, and are now priced at $125,000 – with few takers? You’ll have to live in an under-developed area, with many foreclosed homes, and join the struggling country club, with memberships starting at $40,000. One builder lamented that “I bought this lot in 2007 for $700,000. Now I can buy the one next door for $25,000”.

In another community, planned for 4,000 homes, near the LPGA development in east Volusia county, homes that sold for $440,000 in 2007 are now selling for $162,000 to $222,000. Only 8 houses and 25 townhouses have been built.

Those are a few of the pricing situations in an article in the Orlando Sentinel yesterday.

But be careful. Many of the houses and condos that have been sold, many out of foreclosure, were damaged by departing home-owners, and were bought all the way down by investors who thought they had caught the bottom when able to buy at 20% lower prices, then 30%, only to see prices fall as much as 70% from those in 2006 and 2007.

Yesterday in the U.S. Market.

It was all to the downside yesterday, with the market closing about on its low.

Yesterday’s intraday chart:

The Dow closed down 100 points, or 1.0%. The S&P 500 closed down 1.2%. The NYSE Composite closed down 1.5%. The Nasdaq closed down 1.3%. The Russell 2000 closed down 1.1%. The DJ Transportation Avg. closed down 0.6%.

Asian markets were also down last night.

The DJ Asia-Pacific Index closed down 1.1%.

Among individual countries:

Australia closed down 1.4%. China closed up 1.3%. Hong Kong closed down 0.8%. India closed down 0.2%. Indonesia closed down 0.2%. Japan closed down 1.5%. Singapore closed down 0.7%. South Korea closed down 1.0%. Taiwan closed down 0.9%.

If you’d like to see a three-month chart of these indexes and others, click here, and then click on any of the markets in the list at the left side of the page it takes you to.

Markets this Morning.

European markets are up fractionally after big declines yesterday, up on average of about 0.2%.

Oil is up $.39 a barrel at $79.25.

Gold is down $7 an ounce at $1,096 at the moment.

Markets in the U.S.

In the U.S., a number of important economic reports will be coming out this week, mostly from the middle to end of the week, including consumer confidence, new home sales, existing home sales, etc.

To see the full schedule of the week’s reports click here, and look at the left side of the page it takes you to.

Yesterday’s report that the Conference Board’s Consumer Confidence Index plunged sharply to 46 in February from 56.5 in January spooked the markets, as another sign that economic growth may falter over coming quarters.

Today’s important report will be New Home Sales to be released at 10 a.m.

Fed Chairman Bernanke’s testimony is being debated, although I can’t imagine why anyone thinks he will say anything other than that the Discount Rate hike last week was not a tightening move, but just a ‘normalizing’ move and that interest rates will remain low for some time to come.

Our pre-open indicators are fractionally positive, pointing to the Dow being up 15 points or so in the early going, not meaningful as to direction.

Stock Market Patterns.

This is the week after the month’s options expirations, and tends to be negative, particularly when the options expirations week was more positive than usual.

Interesting Charts of the Morning.

A few interesting charts of the 85 U.S. market sectors we follow.

Please scroll down to see other recent ‘Interesting Charts of the Morning’ and commentary.

To read my weekend newspaper column ‘Why Talk of Re-Regulation of Wall Street is Just Talk!’ click here!

SUBSCRIBERS: There will be an in-depth intermediate to longer-term Markets Signals and Recommendations Report on your website later today, and a new ‘Gold, Bonds, Dollar, Inflation Report’ on your website tomorrow.

Subscribers to the Street Smart Long & Short Stock Advisor: The new issue of the newsletter will be available on your website late this afternoon.

Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term signals and market moves that are most important to investors. So, please consider a subscription to our independent research and recommendations. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?

Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

Tuesday, February 23, 2010. 9:15 am.

It was reported last night that the Ifo German Business Confidence Index has declined in February for the first time in 10 months. The problem is reported as a noticeable cooling in the wholesale and retail sectors. Germany is the largest economy in Europe.

The news follows the recent report that economic growth in the 16 Eurozone countries unexpectedly slowed to just 0.1% in the 4th quarter, and of course the reports of serious debt problems in Greece, Italy, Spain, and Portugal.

Yesterday in the U.S. Market.

The market traded in a very narrow range, with the Dow moving only 65 points between it intraday high and its intraday low, on very low volume of fewer than 1 billion shares traded on the NYSE.

Yesterday’s intraday chart:

The Dow closed down 19 points, or 0.2%. The S&P 500 closed down 0.1%. The NYSE Composite closed down 0.1%. The Nasdaq closed down 0.1%. The Russell 2000 closed up 0.1%. The DJ Transportation Avg. closed up 0.8%.

Asian markets were mixed last night.

The DJ Asia-Pacific Index closed up 0.4%.

Among individual countries:

Australia closed down 0.1%. China closed down 0.7%. Hong Kong closed up 1.2%. India closed up 0.3%. Indonesia closed up 0.8%. Japan closed down 0.5%. Singapore closed up 0.9%. South Korea closed up 0.1%. Taiwan closed up 0.5%.

If you’d like to see a three-month chart of these indexes and others, click here, and then click on any of the markets in the list at the left side of the page it takes you to.

Markets this Morning.

European markets are down, on average of about 0.5%.

Oil is down $1.00 a barrel at $79.30 after peaking above $80 yesterday.

Gold is down $1.70 an ounce at $1,111 at the moment.

Markets in the U.S.

In the U.S., a number of important economic reports will be coming out this week, mostly from the middle to end of the week, including consumer confidence, new home sales, existing home sales, etc.

To see the full schedule of the week’s reports click here, and look at the left side of the page it takes you to.

The S&P Case Shiller Home Pricing Index was just released and showed that home prices fell 0.2% in December and 1.1% in the 4th quarter.

The next report economic report will be Consumer Confidence at 10 am.

Not much to move the market this morning, a few earnings reports, as market wait for Fed Chairman Bernanke’s testimony regarding interest rates, etc., also not likely to be a market-mover.

Our pre-open indicators are fractionally negative, pointing to the Dow being down 10 points or so in the early going, not meaningful as to direction.

Stock Market Patterns.

The next weekly pattern is that the week after options expirations, which this week is, tends to be negative, particularly when the options expirations week was more positive than usual.

Interesting Charts of the Morning.

Markets in many areas still looking like they may have topped out in October and November, with the potential short-term resistance at the 21-day moving average still not resolved.

Please scroll down to see other recent ‘Interesting Charts of the Morning’ and commentary.

To read my weekend newspaper column ‘Why Talk of Re-Regulation of Wall Street is Just Talk!’ click here!

SUBSCRIBERS to the Street Smart Long & Short Stock Advisor: The new issue of the newsletter will be available on your website late tomorrow afternoon.

Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term signals and market moves that are most important to investors. So, please consider a subscription to our independent research and recommendations. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?

Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

Monday, February 22, 2010. 9:15 am.

George Soros, writing in the Financial Times this morning about the debt problems in Greece and its need for emergency rescue, says that “Makeshift assistance should be enough for Greece, but that leaves Spain, Italy, Portugal, and Ireland. Together they constitute too large a portion of Euroland to be helped in this way. . . . the survival of Greece would still leave the future of the euro in question.”

International bankers warned over the weekend that Kuwait’s multi-billion dollar investment company industry could be wiped out by debt repayments on the leveraged investments made before the recession.”

Two weeks ago the bi-partisan Congressional Oversight Panel said in a 183 page report that 2,988 small U.S. banks are about to”get hit by a tidal wave of commercial-real estate loan failures”. That is approximately 38% of the 8,000 banks in the U.S.

Asian markets were up last night – except for China.

Most Asian markets closed up last night, recovering most of the big losses of their previous session, when they plunged sharply on the U.S. Fed’s hike in the Discount Rate.

But the Chinese stock market, which was closed all last week for holidays, didn’t have a big loss in the previous session to recover from. So China re-opened last night, and closed down 1/2%. Interesting.

Among individual countries:

Australia closed up 1.6%. Hong Kong closed up 2.4%. India closed up 0.3%. Indonesia closed up 0.4%. Japan closed up 2.7%. Singapore closed unchanged. South Korea closed up 2.1%. Taiwan closed up 1.6%.

If you’d like to see a three-month chart of these indexes and others, click here, and then click on any of the markets in the list at the left side of the page it takes you to.

Markets this Morning.

European markets are fractionally positive, up on average of about 0.2%.

Oil is up $.20 a barrel at $80.01 at the moment, back above $80.

Gold is down $1 an ounce at $1,122 at the moment, after gaining 2.3% last week.

Markets in the U.S.

In the U.S., a number of important economic reports will be coming out this week, mostly from the middle to end of the week, including Consumer Confidence, new home sales, existing home sales, etc.

I’m particularly interested in seeing the latest revision to 4th quarter GDP, which will be out Friday morning, given Europe’s report that its 4th quarter GDP growth unexpectedly slowed.

To see the full schedule of the week’s reports click here, and look at the left side of the page it takes you to.

Our pre-open indicators are somewhat positive, pointing to the Dow being up 30 points or so in the early going, not meaningful as to direction.

Stock Market Patterns.

The next weekly pattern is that the week after options expirations, which this week is, tends to be negative, particularly when the options expirations week was more positive than usual.

Interesting Charts of the Morning.

Commodities still looking positive in their recoveries from the pullback, but gold stocks less so, having only recovered about 30% of their decline.

Please scroll down to see other recent ‘Interesting Charts of the Morning’ and commentary.

To read my weekend newspaper column ‘Why Talk of Re-Regulation of Wall Street is Just Talk!’ click here!

NOTE: We are in the process of moving this blog to a more robust server so that we can provide more features. As usual in such moves we are having some glitches, with charts disappearing for instance, and inability to upload today’s post earlier. Please bear with us as we get the change made.

SUBSCRIBERS to the Street Smart Long & Short Stock Advisor: The new issue of the newsletter will be out on Wednesday.

Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term signals and market moves that are most important to investors. So, please consider a subscription to our independent research and recommendations. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?

Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

Friday, February 19, 2010. 9:15 am.

Five weeks ago, in mid-January, China spooked markets by announcing it was raising its interbank interest rate, and the amount of cash banks must hold in their reserves.

That announcement shocked global markets into a sharp three-day sell-off that was then extended into a three-week correction.

After the close yesterday, the U.S. Fed announced it is hiking the Discount Rate, the rate banks pay to borrow at its Discount ‘Window’ by 0.25% to 0.75%.

The Fed’s announcement had the same reaction in Asian stock markets last night, with Hong Kong plunging 528 points, 2.6%, and Japan down 212 points, or 2.1%, and had Dow futures down close to 100 points.

But European markets have recovered from the surprise, as have Dow futures.

Yesterday in the U.S. Stock Market.

The market traded mostly sideways all day until mid-afternoon, and then launched into a two hour rally that closed the market up.

It was interesting that both intraday MACD and the market’s internal strength as measured by its intraday Relative Strength Index (RSI), moved in the opposite direction, not confirming the late day rally.

Yesterday’s intraday chart:

The Dow closed up 83 points, 0.8%. The S&P 500 closed up 0.6%. The NYSE Composite closed up 0.6%. The Nasdaq closed up 0.7%. The Russell 2000 closed up 0.7%. The DJ Transportation Avg. closed down 0.1%.

Asian markets were down sharply last night.

The DJ Asia-Pacific Index closed down 1.9%.

China, Taiwan, and Vietnam markets remain closed for the rest of the week for extended Lunar New Year holidays.

Among individual countries that were open:

Australia closed down 0.4%. Hong Kong closed down 2.6%. Japan closed down 2.0%. India closed down 0.9%. Singapore closed down 0.5%. South Korea closed down 1.7%.

If you’d like to see a three-month chart of these indexes and others, click here, and then click on any of the markets in the list at the left side of the page it takes you to.

Markets this morning.

European markets are well off earlier lows, now positive on average of about 0.2%.

Oil is down $.31 a barrel at $78.75 at the moment.

Gold is down $5.40 an ounce at $1,113, although still up $20, or 1.8%, for the week so far.

The U.S. dollar is up in reaction to the Fed’s rate hike.

SUBSCRIBERS: The new issue of the newsletter is on your website from Wednesday evening, and an interim hotline update from last evening.

Markets in the U.S.

In the U.S., this holiday-shortened week has been an average week for potential market-moving economic reports. To see the full schedule of this week’s reports click here, and look at the left side of the page it takes you to.

Yesterday’s reports were negatives, that the Producer Price Index rose 1.4% in January, and that new unemployment claims jumped an unexpected 31,000 last week.

This morning the Consumer Price Index was reported as having risen only 0.2% in January, better than expected.

The Fed’s surprise rate hike announcement had the Dow futures down as much 90 points overnight. But they have recovered completely this morning as the hike is being dismissed as unimportant and not another sign that the Fed has begun to remove the punchbowl.

Our pre-open indicators are now only fractionally negative, pointing to the Dow being down 5 points or so in the early going, not meaningful to market direction.

Stock Market Patterns.

There is no weekly pattern for this week.

The daily pattern is for the day after the Presidents Day holiday to be a down day (down 4 out of the last 5 years), but it certainly was not Tuesday, and for today, the day of this month’s options expirations, to be down (down 7 of the last 10 years).

Interesting Charts of the Morning.

It’s interesting that a number of major markets in Asia had reached the potential overhead resistance at their 21-day moving averages, and although closing fractionally above it were obviously in the vicinity of that resistance when they plunged last night in reaction to the U.S. Fed’s rate hike.

The major U.S. indexes reached the same potential resistance level and have closed above the m.a. to a somewhat greater degree, and have recovered half of their correction.

Please scroll down to see other recent ‘Interesting Charts of the Morning’ and commentary.

To read my newspaper column of last weekend ‘Uncertainty Brings Market Volatility!’ click here! It will be replaced with this weekend’s column later today.

SUBSCRIBERS: The new issue of the newsletter is on your website from Wednesday evening, and an interim hotline update from last evening.

Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term signals and market moves that are most important to investors. So, please consider a subscription to our independent research and recommendations. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?

Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

Thursday, February 18, 2010. 9:15 am.

WalMart released its 4th quarter financial report this morning, reporting its earnings were up 22%, but with much of it due to cost-cutting. Its overall sales rose only 4.4%, its third straight quarter of slower sales growth, and falling short of Wall street’s estimates, while same store sales (stores open more than a year) fell 1.6%.

Gold plunged last night on IMF announcement,

Gold plunged sharply at the end of the day yesterday, and again in the night session last night. After being as high as $1128 early in the day, gold was down a big $32 an ounce at $1,096 at its low last night. It has since recovered some, trading at $1,108.

The catalyst for the plunge was an announcement at day’s end from the International Monetary Fund (IMF) that it will be selling 191.3 metric tonnes of gold on the market ‘shortly’.

Yesterday in the U.S. Stock Market.

The market traded in a very narrow range, uncertain whether to rally further or sell off. The Dow traded in a range of just 60 points from its intraday high to its intraday low, and closed up 40 points, 0.4%, thanks to late day buy programs.

Yesterday’s intraday chart:

The Dow closed up 40 points, 0.4%. The S&P 500 closed up 0.4%. The NYSE Composite closed up 0.3%. The Nasdaq closed up 0.5%. The Russell 2000 closed up 0.6%. The DJ Transportation Avg. closed up 0.2%.

Asian markets were mostly down last night.

China, Taiwan, and Vietnam markets remain closed for the rest of the week for extended Lunar New Year holidays.

Among individual countries:

Australia closed down 0.3%. Hong Kong closed down 0.5%. Japan closed up 0.3%. India closed down 0.6%. Singapore closed down 0.9%. South Korea closed down 0.4%.

If you’d like to see a three-month chart of these indexes and others, click here, and then click on any of the markets in the list at the left side of the page it takes you to.

Markets this morning.

European markets are off earlier highs after U.S. economic reports this morning, now up only fractionally on average of about 0.2%.

Oil is just about unchanged at $76.32 at the moment.

Gold is off last night’s low, but still down $12 an ounce at $1,108, although still up $16, or 1.5%, for the week so far.

SUBSCRIBERS: The new issue of the newsletter and a new hotline update are on your website from last evening.

Markets in the U.S.

In the U.S., this holiday-shortened week is an average week for potential market-moving economic reports, including new housing starts, the minutes of the Fed’s last FOMC meeting, and the Producer Price Index. To see the full schedule of this week’s reports click here, and look at the left side of the page it takes you to.

Two of today’s reports were released at 8:30 and were negative surprises.

It was reported that the Producer Price Index, measuring inflation at the producer level,  rose 1.4% in January. The core rate (with the cost of food and energy removed) rose 0.3%.

And it was reported that new unemployment claims jumped an unexpected 31,000 last week.

Coupled with WalMart’s mixed sales and earnings report, the economic reports weakened our early morning indicators further.

Our pre-open indicators are somewhat negative, pointing to the Dow being down 35 points or so in the early going.

Stock Market Patterns.

There is no weekly pattern for this week.

The daily pattern is for the day after the Presidents Day holiday to be a down day (down 4 out of the last 5 years), but it certainly was not yesterday, and for Friday, the day of this month’s options expirations, to be down (down 7 of the last 10 years). The pattern around the holiday began with its frequent pattern of the day before the holiday being down (down 15 of last 18 years, now 16 of last 19 years).

Interesting Charts of the Morning.

It’s interesting that the dollar has been in its new bull market since early December, which means it’s been going up independent of other assets, during periods when the stock market and gold were declining, and when they were rallying.

Please scroll down to see other recent ‘Interesting Charts of the Morning’ and commentary.

To read my weekend newspaper column ‘Uncertainty Brings Market Volatility!’ click here!

SUBSCRIBERS: The new issue of the newsletter and a new hotline update are on your website from last evening.

Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term signals and market moves that are most important to investors. So, please consider a subscription to our independent research and recommendations. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?

Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

Wednesday, February 17, 2010. 9:15 am.

The U.S. Treasury Department reported yesterday that foreign buyers cut back their buying of U.S. Treasury bonds by a record amount in December.

It reported that China, previously the largest holder of U.S. debt, sold $34.2 billion of U.S. Treasuries in the month. China had warned last year that it would cut back on U.S. dollar denominated assets. The sales move Japan back into first place as the largest holder of U.S. treasuries.

That foreign buyers might some day back away from supporting U.S. debt as substantially as they have in the past has been a worry for some years.

But, as with the other changes in financial strategies coming out of China, including the moves to begin reversing their stimulus efforts before other countries, the news is being pretty much ignored by markets.

Warren Buffett is a buy and hold investor?

In my last book I included a chapter about how Warren Buffett promotes his image of being a buy and hold investor, with his publicized folksy sayings like “My favorite holding period is forever”, while having a clear history of being one of the best of market-timers.

Another report yesterday reminded me of how that is.

In his latest filing of holdings with the SEC (for the December quarter), Buffett reported that in the last three months of the year he significantly cut his holdings in the energy sector, selling 20 million shares of Conoco Phillips, and 808,000 shares of Exxon Mobil (which he held somewhere around only six months). He also sold 1 million shares of CarMax, 2 million shares of Ingersoll-Rand, closed out his holdings in Norfolk Southern and Union Pacific, sold 8.8 million shares of Proctor & Gamble, 680,000 shares of Sun Trust Bank, and 2 million shares of Wellpoint. In the other direction he bought 3.5 million shares of Iron Mountain, 4.7 million shares of Republic Services, and another 1 million shares of WalMart.

That was in just three months of trading.

In an interesting note, Buffett also received permission from the SEC to omit some trades from his report “to protect his trading strategy” from public view. Ah yes, a buy and hold investor.

Information in headlines is often interesting, but fleeting.

On Monday, a Wall Street Journal headline was “Dollar Up As Europe Reels”. The accompanying story was of how “fears of a possible debt crisis is pushing the greenback to its highest level in nine months!”

Yesterday, the very next day, headlines in the media were “Commodities soar on weak dollar.”

I like the comment by Joe Donohue, CEO of Desert Shores Capital, “With the increased volatility, you have to be hedged. Otherwise, you can really get killed on some of the gaps that you see when there are headlines."

It’s not exactly hedging, but our holdings in both gold and the U.S. dollar, which usually move opposite to each other, have both been rallying nicely, but often on alternate days.

Yesterday in the U.S. Stock Market.

The market put in a very positive day, with the Dow closing up 169 points.

Volume was very low in post holiday trading until the final hour. But even with the last hour surge only 1.08 billion shares traded on the NYSE.

Yesterday’s intraday chart:

The Dow closed up 169 points, 1.7%. The S&P 500 closed up 1.8%. The NYSE Composite closed up 2.0%. The Nasdaq closed up 1.4%. The Russell 2000 closed up 1.6%. The DJ Transportation Avg. closed up 2.0%.

Asian markets followed U.S. with strong rally last night.

Asian countries that were closed both Monday and Tuesday, including Hong Kong and Singapore, played catch-up to the up-days Monday and yesterday in Europe, and yesterday’s rally in the U.S.

China, Taiwan, and Vietnam markets remain closed for the rest of the week for extended Lunar New Year holidays.

Among individual countries:

Australia closed up 2.2%. Hong Kong closed up 1.3%. Japan closed up 2.7%. India closed up 1.3%. Singapore closed up 1.3%. South Korea closed up 1.7%.

If you’d like to see a three-month chart of these indexes and others, click here, and then click on any of the markets in the list at the left side of the page it takes you to.

Markets this morning.

European markets are up strongly on average of more than 1%.

Oil is unchanged at $77.02 at the moment, after yesterday’s big gain.

Gold is down $2 an ounce at $1,118, after yesterday’s big gain of $26.

Markets in the U.S.

In the U.S., this holiday-shortened week will be an average week for potential market-moving economic reports, including new housing starts, the minutes of the Fed’s last FOMC meeting, and the Producer Price Index. To see the full schedule of this week’s reports click here, and look at the left side of the page it takes you to.

Yesterday’s Housing Market Index, which measures the confidence of home-builders was reported to have risen to 17 in February from 15 in January, still very negative levels, indicating that only 17% of builders have confidence in the housing industry for coming quarters.

This morning it was reported at 8:30 am that new housing starts rose 2.8% in January, about in line with expectations. But Permits for future starts fell 4.9%.

The report had little effect on our early morning indicators.

Still to come today are Industrial Production at 9:15 am, and the minutes of the Fed’s last FOMC meeting at 2 P.M.

Our pre-open indicators are somewhat positive, pointing to the Dow being up 35 points or so in the early going.

Stock Market Patterns.

There is no weekly pattern for this week.

The daily pattern is for the day after the Presidents Day holiday to be a down day (down 4 out of the last 5 years), but it certainly was not yesterday, and for Friday, the day of this month’s options expirations, to be down (down 7 of the last 10 years). The pattern around the holiday began with its frequent pattern of the day before the holiday being down (down 15 of last 18 years, now 16 of last 19 years).

Interesting Charts of the Morning.

Markets are at a very interesting point right now.

I’ve been noting how in their pullbacks since mid-January all the major U.S. indexes and most every global market, had become short-term oversold beneath their 21-day moving averages, almost sure to being at least a rally back up to the m.a. The question was whether they will then break out above the m.a. and resume the p
revious rally, or will the m.a., which was support on the way up, now be overhead resistance.

And here they are. The rally of the last week has carried them all back up to the vicinity of the m.a., in fact closing fractionally above it in the big up-day yesterday. The benchmark S&P 500 closed yesterday at 1,094. Its 21-day m.a. is at 1,092. No, that does not constitute a breakout just yet. The m.a.’s aren’t that precise as support or resistance.

The U.S. indexes have recovered about 1/3rd to 1/2 of their declines.

Global markets, like Hong Kong, although back up to their 21-day m.a., have recovered smaller percentages of their declines.

Please scroll down to see other recent ‘Interesting Charts of the Morning’ and commentary.

To read my weekend newspaper column ‘Uncertainty Brings Market Volatility!’ click here!

SUBSCRIBERS: The new issue of the newsletter will be out late today, sometime late this evening.

Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term signals and market moves that are most important to investors. So, please consider a subscription to our independent research and recommendations. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?

Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

Tuesday, February 16, 2010. 9:15 am.

Barron’s cover story this week reveals the “World’s Most Respected Companies”. The top five are: Apple, Johnson & Johnson, Proctor & Gamble, IBM, and Berkshire Hathaway.

They are the companies “most admired by investors”. A money manager who helped Barron’s produce the list said, “Respected companies aren’t going to fall as far in the bad times, and they come back better.”

Huh?

Brokers won’t have any trouble selling those five stocks to investors today. They can just quote Barron’s that they are “the five most respected companies in the world, and are safe as they don’t fall as much in bad times”.

How many will bother to check the facts? Except for drug-maker Johnson & Johnson, the five are hardly safe havens, most falling as much or more than the average stock in both the 2000-2002 bear market and the 2007-2009 bear.

In the 2000-2002 bear market the S&P 500 fell 50.5% from its peak to its low, the Dow 54.4%.

In that bear market, Apple fell 81%; Johnson & Johnson fell 37%; Proctor & Gamble fell 55.4%; IBM fell 60%; and Berkshire Hathaway fell 53.0%.

In the recent 2007-2009 bear market the S&P 500 fell 58%, and the Dow fell 54.4%.

In that bear market Apple fell 60%; Johnson & Johnson fell 36%; Proctor & Gamble fell 40.2%; IBM fell 47%; and Berkshire Hathaway fell 53.0%.

Safe havens?

I’m not sure it’s a good thing to chose stocks from such a list. It wasn’t that long ago that the most respected companies were General Motors, General Electric, Microsoft, WalMart, and Bank of America.

Investor confidence in Germany fell – again.

The ZEW Institute Index of German investor confidence of the outlook for the next six months fell to 45.1 this month from 47.2 in January. It was the 5th straight monthly decline.

Germany is Europe’s largest economy and the several months of decline in investor confidence seemed to be an accurate barometer, given last week’s surprise report that GDP growth in the 16 Eurozone countries rose only 0.1% in the 4th quarter, raising some concerns that Europe may be sliding back into recession.

Investor sentiment in U.S. has seen a decline in bullishness.

Investor bullish sentiment rises in rallies and bull markets, usually reaching an extreme of bullishness near tops. Investor bearishness rises in market corrections and usually reaches an extreme of bearishness near correction lows.

Bullish sentiment had reached fairly high levels prior to the current correction, and bearishness has been rising over the last six weeks.

Mark Hulbert reports that his Newsletter Sentiment Index has plunged to a current 20.3% from 65.2% in early January. The index is based on the average exposure to the stock market recommended by investment newsletters. Newsletters on average were recommending 65.2% exposure to the stock market in early January, and have now cut back on average to just 20.3% exposure.

The poll of its members by the American Association of Individual Investors, which was 49.2% bullish, only 23% bearish January 1, are now only 36.8% bullish, 41.9% bearish, working its way toward 55% bearish which is usually considered to be the beginning of the extreme zone.

Asian markets closed up some last night on low volume.

Many markets in Asia were closed for holidays yesterday, including China, Hong Kong, Singapore, Malaysia, Taiwan and Vietnam. Those that were open closed up some.

Among individual countries:

Australia closed up 0.5%. Japan closed up 0.2%. India closed up 1.2%.

If you’d like to see a three-month chart of these indexes and others, click here, and then click on any of the markets in the list at the left side of the page it takes you to.

Markets this morning.

European markets are well off earlier highs, but are still up on average of about 0.6%.

Oil is up a big $1.92 at 76.05 at the moment.

Gold is soaring, up $26 an ounce, more than 2%, at $1,117 at the moment.

Markets in the U.S.

In the U.S., this holiday-shortened week will be an average week for potential market-moving economic reports, including new housing starts, the minutes of the Fed’s last FOMC meeting, and the Producer Price Index. To see the full schedule of next week’s reports click here, and look at the left side of the page it takes you to.

Our pre-open indicators are very positive, pointing to the Dow being up 90 points or so in the early going.

Stock Market Patterns.

There is no weekly pattern for this week.

But the daily pattern is for the day after the Presidents Day holiday to be a down day (down 4 out of the last 5 years), and for Friday, the day of this month’s options expirations, to be down (down 7 of the last 10 years). The pattern around the holiday began with its frequent pattern of the day before the holiday being down (down 15 of last 18 years).

Interesting Charts of the Morning.

I’m sorry but I don’t have time this morning to provide charts of the morning.

Please scroll down to see other recent ‘Interesting Charts of the Morning’ and commentary.

To read my weekend newspaper column ‘Uncertainty Brings Market Volatility!’ click here!

SUBSCRIBERS: The new issue of the newsletter will be out tomorrow.

Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term signals and market moves that are most important to investors. So, please consider a subscription to our independent research and recommendations. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?

Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

Saturday, February 13, 2010. 10:15 am.

It seemed for awhile early this week that the feared collapse of Greece due to its huge debt and deficit problems was going to receive a quick and easy fix. The 16 Eurozone countries were meeting and would simply come to the rescue with a bailout plan.

However, their first response did little to bolster that hope, when they issued a statement mid-week saying they will take “determined and coordinated action if needed” to assist member nations, but provided no details, and did not specifically name Greece.

The situation has gone from hazy to worse.

In a televised address before his cabinet yesterday, George Papandreou, prime minister of Greece, lashed out at his country’s EU partner nations, saying they are sending out a mixed message about Greece, with their debates and foot-dragging, creating a “psychology of looming collapse that could be self-fulfilling.”

Reports are that he infuriated those he looks to for a bailout, at a time when there was already considerable dissension among the other EU nations as to what should be done about Greece’s situation.

In the background is that Greece’s previous administrations allegedly falsified statistics to hide the country’s actual financial condition.

Debates circle around why member nations that obey the rules of limiting deficits to 3% of economic output should bail out countries who don’t follow the rules.

Greece by itself, with a budget shortfall of only $75 billion, is not thought to be a costly problem to solve.

But concerns include that to do so would only encourage others to also ignore the rules on which the union was formed, and would make it difficult to refuse them the same help. Lurking in the shadows are rumors of potential similar debt problems in Iceland, Portugal, and Spain.

Why Congress won’t be able to rein in Wall Street!

Once again after a financial collapse in which the shenanigans of the financial industry played a huge role in creating a bubble (real estate this time) and record risk levels in the financial sector, Congress has investigated and assures the nation it will reform Wall Street and banks to protect investors, consumers, and the economy from such things ever happening again.

It will not happen to any meaningful degree – for two reasons.

The workings of the financial industry are too complex for outsiders to understand, let alone for politicians juggling numerous other important issues, bills, budgets, and constituent concerns at the same time, and with differing loyalties and goals. Even the full-time staff of regulators have to depend on insider whistle-blowers to identify the problems, and on insider confessions, insider e-mails, etc., for evidence. The financial industry is just too complex, its tentacles entwined throughout global economies and markets.

Therefore, it’s next to impossible for lawmakers to understand the complex issues enough to refute Wall  Street insiders who appear before their committees, or meet with them in private, to lobby against each detail of proposed reform. They merely talk over the heads of the lawmakers’ knowledge to explain how that change would be okay for one area, but would have terrible ramifications in other areas of the financial system. And the lawmakers cave. You’ve seen how often the tactic works.

The second and larger reason is money.

During the 2008 elections Wall Street provided candidates with $155 million in campaign funds, roughly $88 million to Democrats, and $67 million to Republicans. In the year following the elections Wall Street firms and executives have handed out $42 million to lawmakers, most of it to the members of House and Senate banking committees, and House and Senate leaders. Wall Street is right up their with the largest and best financed lobbying efforts in Washington. This in the mid-year election year when their re-election looms larger than any other consideration. 

And Wall Street’s methods are rarely transparent and in the open.

For example, a number of bailed-out banks, including some of the biggest names, have formed a group called the Coalition for Business Finance Reform. Sure sounds like a group that is on the side of tax-payers and reforms. But its goal is to lobby against regulation of ‘over the counter’ derivatives, the customized contracts that are traded by the large firms off the normal exchanges, that is, without public knowledge or transparency.

Yesterday in the U.S. stock market.

Another volatile day (and week).

Yesterday the bottom dropped out at the open, with the Dow down 161 points in less than an hour. It then began to climb back, with unusual volatility. But it did so in a pattern of higher lows each time it gave up rally attempts, closing down only 45 points for the day.

But it was a mixed close, with the more speculative Nasdaq, Nasdaq 100, and Russell 2000 closing up fractionally.

In the intraday volatility of buying and selling that had the Dow reversing 50 to 80 points several times, volume was higher than it has been, with 1.4 billion shares traded on the NYSE.

Yesterday’s intraday chart:

The Dow closed down 45 points, or 0.4%. The S&P 500 closed down 0.3%. The NYSE Composite closed down 0.3%. The Nasdaq closed up 0.3%. The Russell 2000 closed up 0.9%. The DJ Transportation Avg. closed down 0.1%.

Global markets for the week.

After three straight down weeks, a positive week. Also positive for gold and the U.S. dollar.

If you’d like to see a three-month chart
of any or all of the above indexes click here, and then click on any of the markets in the similar list at the left side of the page it takes you to.

What’s next for the market?

The news from China that it was increasing bank reserve requirements again to slow its economy, came out Friday morning, after Asian markets were closed.

Due to Asian holiday closings next week, many Asian markets will not be able to react for several days to a week. In addition to the U.S. market being closed on Monday for the President’s Day holiday, South Korea markets will be closed on Monday. Hong Kong, Singapore, and Malaysia will be closed Monday and Tuesday. China, Taiwan and Vietnam markets will be closed all week, for Lunar New Year.

By then it may be forgotten as other situations will be leading markets.

In the U.S., next week will be an average week for potential market-moving economic reports, including new housing starts, the minutes of the Fed’s last FOMC meeting, and the Producer Price Index. To see the full schedule of next week’s reports click here, and look at the left side of the page it takes you to.

The market may pay more than normal attention to the reports for clues to the U.S. economy, given the worries of slowing economies in Europe (4th quarter GDP up only 0.1%) and China taking repeated steps to get its economic growth slowed.

That should be enough fodder to create continued up and down volatility.

Stock Market Patterns.

There is no weekly pattern for next week.

But the daily patterns are for the day after the Presidents Day holiday to be a down day (down 4 out of the last 5 years), and for Friday, the day of this month’s options expirations, to be down (down 7 of the last 10 years). The pattern around the holiday began with its frequent pattern of the day before the holiday being down (down 15 of last 18 years).

Interesting Charts of the Morning.

As I’ve been showing you over the last ten days, global markets pulled back, corrected, whatever you want to call it, to the point of being short-term oversold beneath their 21-day moving averages, almost sure to bring a short-term oversold rally back up toward the m.a.

That seemed to be what was happening this week.

The big question is whether the market will be able to break back above the m.a. and resume the rally and bull market, or whether the m.a will now be overhead resistance on rally attempts, with the pullback of previous weeks resuming.

A few representative charts:

Please scroll down to see other recent ‘Interesting Charts of the Morning’ and commentary.

To read my weekend newspaper column ‘Uncertainty Brings Market Volatility!’ click here!

NOTE: There will be no blog update on Monday, the holiday. I’ll be back Tuesday a.m. after a look at events over the long weekend, Asian markets Monday night, and early morning indicators for Tuesday.

SUBSCRIBERS: The new issue of the newsletter will be out on Wednesday.

Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term signals and market moves that are most important to investors. So, please consider a subscription to our independent research and recommendations. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?

Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

Friday, February 12, 2010. 9:15 am.

For the second time in four weeks, Chinese regulators raised the level of cash or equivalents Chinese banks must hold, taking money out of circulation, as they continue recent efforts to slow the country’s economic growth, to prevent inflation and potential bubbles in speculative investments and real estate.

It was a similar report four weeks ago that upset global markets and created the four week decline in global stock markets.

Meanwhile, it was reported from Europe that the economic recovery in Europe stalled in the fourth quarter, with GDP in the 16 Eurozone countries rising only 0.1%. That is raising concerns that Europe may be slipping back into recession, at the same time that potential government debt crisis are showing up in some European countries, notably Greece.

The disappointing 4th quarter GDP report has European economists pointing out that Europe’s recovery in the 3rd quarter was due to temporary situations including government stimulus spending, and temporary inventory building.

Those are much the same factors that have economists expecting the U.S. economic recovery will slow in coming quarters. Europe’s numbers indicate it is possible for sure.

Yesterday in the U.S. Stock Market.

The market moved sideways until the ‘magic hour’ of 11 a.m. when counter trend moves often take place. The market then took off like a rocket, with the Dow up 123 points by mid-afternoon, and it hung onto the gain to the close, closing up 105 points, or 1.1%.

Once again volume was low, with just over 1 billion shares (1.07 billion) traded on the NYSE.

Yesterday’s intraday chart:

The Dow closed up 105 points, 1.1%. The S&P 500 closed up 1.0%. The NYSE Composite closed up 1.2%. The Nasdaq closed up 1.4%. The Russell 2000 closed up 1.6%. The DJ Transportation Avg. closed up 1.7%.

Asian markets mostly closed up last night.

The DJ Asia-Pacific Index closed up 0.3%. India and Taiwan were closed for a holiday. Japan re-opened after being closed for a holiday.

Among individual countries:

Australia closed up 0.3%. China closed up 1.1%.  Hong Kong closed down 0.1%. Japan closed up 1.3%. Indonesia closed up 1.0%. Singapore closed up 0.2%. South Korea closed down 0.3%.

NOTE: Next week, in addition to the U.S. market being closed on Monday for the President’s Day holiday, South Korea markets will be closed on Monday, Hong Kong, Singapore, and Malaysia will be closed Monday and Tuesday, and China, Taiwan and Vietnam markets will be closed all week, for Lunar New Year.

If you’d like to see a three-month chart of any or all of the above indexes click here, and then click on any of the markets in the similar list at the left side of the page it takes you to.

Markets this morning.

European markets are mixed, London and France down some, Germany up some, but unchanged on average, after being mostly down yesterday.

Oil is down $1.40 at 73.85 at the moment.

Gold is down $9 an ounce at $1,085 at the moment, giving back some of yesterday’s big rally, but still up $19 for the week so far.

Markets in the U.S.

There were very few potential market-moving economic reports this week. To see the full schedule of the week’s reports click here, and look at the left side of the page it takes you to.

Today’s report was that Retail Sales rose 0.5% in January, better than forecasts. The Consumer Sentiment Report will be released at 9:55 a.m.

But the pre-open indicators are not impressed by the retail sales numbers, apparently focused on reports of the economic recovery in Europe slowing, and news from China that it is raising bank reserve rates again, taking still more steps to slow its economy.

Our pre-open indicators are fairly negative, pointing to the Dow being down 60 points or so in the early going.

Stock Market Patterns.

This is the week before this month’s options expirations week, and the week before tends to be negative. However, as I’ve been saying, with the market was so short-term oversold that was in question.

So far, after four days, the market indexes is up, thanks mostly to yesterday’s additional triple-digit rally day, after previously having a triple-digit up day and a triple-digit down day, and a small decline on Wednesday. As of yesterday’s close the Dow is up 1.3% for the week, the S&P 500 up 1.1%.

Interesting Charts of the Morning.

The Dow came close yesterday to testing whether its 21-day m.a. will now be overhead resistance or if it can break out above it again and resume the rally.

The m.a. is at 10267, 123 points above yesterday’s close, but the m.a. itself is rolled over to the downside declining about 30 points a day.

And has gold again found support at its 30-week m.a.?

Please scroll down to see other recent ‘Interesting Charts of the Morning’ and commentary.

To read my newspaper column of last weekend titled ‘Can Corrections Be Better Than Rallies?’ click here! It will be replaced with this weekend’s later today.

Note: Although tomorrow is Saturday and markets are closed, I will be back in the morning with a wrap-up of whatever turns out to be today’s market action, and the week, and commentary and an outlook for next week. But there will be no blog on Monday morning when U.S. markets will be closed for the Presidents Day holiday.

Subscribers: The mid-week intermediate-term Market Signals and Recommendations update is on your website from Wednesday, and the new issue of the newsletter will be out next Wednesday.

Non-subscribers: While it’s helpful to look at daily an
d short-term expectations, it is the intermediate and longer-term signals and market moves that are most important to investors. So, please consider a subscription to our independent research and recommendations. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?

Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.