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Technical Forecast for StocksLast week, the President's $825-billion economic stimulus program was promptly passed by the House of Representatives, but it now faces more scrutiny, modifications and delays in the Senate. The core of the stimulus program consists of spending on infrastructure, tax cuts and a boost for the housing sector. As huge as the stimulus program is, it is pale in comparison to the money the governments have already sunk and will continue to sink into the financial sectors to make credit available and revive the appetite for borrowing. The announcements of stimulus programs and statements from the January 27/28 Federal Reserve Open Market Committee meeting -- that the Fed intends to employ all available tools to resume sustainable economic growth -- helped the market to bounce off the January 20/09 lows. From a technical point of view, the rebound from a level still 5.0% above the November 20/08 lows can be viewed as the first, but also the last, re-test of the November '08 bear market lows. NYSE indicators following breadth and volume trends, including the NYSE Upside/Downside Volume Line, have also held their ground, and lately performed better than the price indices. What has been particularly encouraging is the number of NYSE stocks making 52-week lows at the November '08 lows, being less than at the October '08 lows and then being still lower at the January '09 lows. The consensus of indicators I follow remains neutral at +9.0%, with only the Fundamental/Monetary group being bullish at +20%. Considering the devastation suffered by equities, I would expect more bullish readings. This especially applies to the Sentiment group. At +10%, its reading reflects that the degree of investor fear is not deep enough for the economy and financial markets experiencing the worst meltdown since the 1930s. On the whole, I still think that this bear market is not done, and the eventual 2009 lows will be at least 5.0% to 10% below the November '08 lows. Profit Confidential --- http://www.profitconfidential.com/ LOMBARDI PUBLISHING CORPORATION News, Analysis, and Information Services Since 1986. One Million Customers in 141 Countries. Lombardi Publishing Corporation Financial Publications Division 350 Fifth Avenue, Suite 3304 New York, NY 10118-3304 --- Copyright 2008; Lombardi Publishing Corporation. All rights reserved. No part of this e-newsletter may be used or reproduced in any manner or means, including print, electronic, mechanical, or by any information storage and retrieval system whatsoever , without written permission from the copyright holder. Article Tags: Mulu Rogram Source: Free Articles from ArticlesFactory.com
ABOUT THE AUTHORTony Jasansky, P. Eng, is the developer of a proprietary general gauge called Marketmetre that tracks several fundamental and technical indicators. A hardcore technical analyst and avid follower of corporate insider market trades, over the past quarter century Tony’s Marketmetre has successfully called every major market move. Tony writes a monthly column in Profit Confidential.
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