Yesterday's late day technical call maybe proved wrong by the auto bail out
Steve Cook on Disciplined Investing

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Economics

   This Week’s Data

    November leading economic indicators were reported down .4%, in line with expectations and as compared to October’s reading of -.8%.
http://econompicdata.blogspot.com/2008/12/leading-economic-indicators-point-to.html


    The Philadelphia Fed released its December business survey index which came in at -32.9 versus estimates of -40.0 and the November number of -39.3.

   Other

    The bear case on the economy:
    http://www.forbes.com/opinions/2008/12/17/bernanke-interest-recession-oped-cx_nr_1218roubini.html

    On Wall Street bonuses:
    http://www.ritholtz.com/blog/2008/12/clawing-back-at-exec-comp-part-ii/

    A look at the Fed’s balance sheet:
    http://www.calculatedriskblog.com/2008/12/federal-reserve-assets.html

    The coming Obama stimulus package:
    http://www.calculatedriskblog.com/2008/12/obama-stimulus-plan.html
   
Politics

  Domestic

  International War Against Radical Islam

The Market
    
    Technical

    On the heels of a caution regarding General Electric’s credit worthiness and more dawdling on the auto bail out, stocks declined.  The indices (DJIA 8604, S&P 885) closed well below the upwards sloping trend line of November low (DJIA 8891, S&P 903).  Surprisingly, even though stocks were down big, so was the volatility index.
http://www.ritholtz.com/blog/2008/12/sp-ges-credit-rating-at-risk/

    As you know, I ordinarily don’t look at a one day break out from a support/resistant level as confirmation of a trend violation.  However, because (1) the ascending [support] trend line was close to intersecting the current resistance level [see below] and (2) the extent of the decline below the support trend line was so large, I think that this is strong evidence that the short term November to present up trend has been broken.

    Of course, with the announcement this morning on the auto bail out, my technical judgment may be proven wrong by the fundamentals.
   
   Fundamental

    As you know, when it became clear to me that stocks had broken to the downside, our Portfolios took some money off the table.





Posted 12-19-2008 8:34 AM by Steve Cook