Today was another example of hope and a prayer in the stock markets. Since the other day when we gapped down more of the “sheeple” jumped back into the market thinking, no hoping beyond hope that the “bottom” is in place. Today’s action on the charts was simply backfilling the gap from yesterday’s drop. Based on pure technical analysis this is what I see for tomorrow, we will have an attempt at breaking 7650 and if that is cleared then an attempt at 7700 on the down side 7560 if that is broken 7500 and if that goes then down to 7380. On a chart basis I’d say we have a lot more chance of an overall down day than up day. Of course this is all pedicated on no news coming out from G-20, Europe, or elsewhere. – Tomorrow we will have Part 3 of “Is The Party Over for Stocks?”. – Good Investing! – Jschulmansr

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Last week I watched a video analysis of the S&P and Crude Oil markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Crude seemed to steady out, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Crude Oil and one on the S&P, that gives us an indepth technical look into these markets. Again the videos are free and very informatitive. Just Click on the Links Below…

S&P Video Analysis:  Crude Oil Projections:

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What Marks The Bottom? – Seeking Alpha

By: Kevin S. Price of  Interlake Capital

We’ve touched on this topic before, but with calls of “the bottom is in!” reverberating across Wall Street, we thought it might be time to revisit it.

What are the markers of durable troughs, often referred to as “bottoms,” in asset values?

There’s no failsafe sign, of course, and there’s no guarantee that this process will play out as its historical predecessors have. But if we could point to a single factor common to most long-term bottoms, it’s a sequence in which traders and investors move from hope to revulsion to indifference.

First you’ll hear expressions of hope that the bottom is in. We’ve certainly heard plenty of that over the last three weeks or so as stocks have lurched up from their March 9^th lows.

Then you’ll hear expressions of revulsion against stocks, including the idea that investors might be better off avoiding them altogether in favor of “safer” assets such as bonds. As it happens, we saw just such an argument a few days ago from a well-known, highly-regarded analyst. Far from discouraging for equity investors, this is a sign that the revulsion stage is underway.

Ultimately, however, what we need to see is a grinding sense of indifference toward stocks. Partly reflected and partly driven by the media, investors will develop a sense that stocks just aren’t worth the effort. They’ll neither love ’em nor hate ’em. They’ll simply stop talking about them altogether. Under those circumstances, neither buyers nor sellers will have the itchy trigger fingers they’ve had over the last few months, and the buying and selling will happen quietly, off the front pages. Only then, we think, will the foundation be set for the next major bull run in equity values.

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Why This Is Just Another Bear Market Rally -Seeking Alpha

By: Vinay Ayala of Bullish Bankers

The equity market has taken a turn for the better in the past couple of weeks, reversing losses for many investors who have ridden this market down. It has been a welcome change for investors as we bounce off lows and are beginning to put some faith behind equities again. The million dollar question: is this the turnaround we have all been looking for, or is this just another bear market rally?

In my opinion, this is just another bear market rally. Rallies of 5%+ in one day do not occur during bull markets, but they are very typical of bear markets and normally occur during bear market rallies. What has really changed fundamentally over the past few weeks in the macro-economy? To tell you the truth, not much.

It is my opinion that three things need to get better before we can consider ourselves to be out of this crisis: an improvement in the employment picture, more stable credit markets, and a somewhat stable housing market. Let’s look at how these criteria have changed over the past few weeks.

1. Employment – Currently the unemployment rate stands at 8.1%, with estimates for the March unemployment number to be somewhere around 8.6%. Initial jobless claims went up for the week ending March 21st by 8,000, with a total of 5.56 million filing for continuing unemployment claims. These are still at 25+ year lows and have shown no sign of improving throughout this whole rally. Everyone is still expecting possible double digit unemployment, which will wreak havoc on consumer spending, since individuals will have no steady source of income. This could also lead to more and more defaults on loans, mortgages, and credit card payments; further deteriorating the state of the financial sector.
2. Housing – The housing market has yet to reach a bottom! New home sales were up 4.7% in February, so a bottom must have been reached, right? Wrong. Housing prices fell 2.9 percent and inventories are still at extremely elevated levels at a 12.2 months supply. In a normal housing market there is only about 6 months of supply in the system, so for those that don’t think that housing can get worse, it can. There are still more sellers than buyers in the market. Home prices are down about 28% since the peak according to the Case-Shiller Index, but this number faces some more serious downward pressure as sellers are going to have to compromise to bring the market closer to equilibrium in order to reduce inventories. So unless we see a huge drop in prices in a very short amount of time, I am not ready to say that the housing market has bottomed. Until the housing market reaches equilibrium, I do not think we can see an economic recovery because of all the ties it has to other aspects of the economy, like credit.
3. Credit – Conditions in the credit markets have not really improved throughout the rally. I think if there is one thing everyone has been adamant about, it is trying to revive the lending markets so that the economy can get going again. Companies need debt to fulfill short term working capital needs, and having access to liquid credit markets is essential for day to day operations. Since the beginning of March, the TED spread (the difference between the 3 month treasury note and 3 month LIBOR rate), which highlights credit risk within the lending markets, has gone up by almost 10%. This is indicating continued weakness in the short term credit markets, which must be corrected before we can see any type of recovery within the financial system.

Looking at the above factors it is clear that it has not been a broad based rally where we are seeing recovery in some of the most depressed asset classes, credit and housing. The fundamentals of the macro-economy have not gotten better and this really makes me doubt the sustainability of this rally, considering that unemployment is skyrocketing, the housing market is still in free-fall, and the credit markets have not had any marked improvement. Couple this with an increasing savings rate, a $13 trillion loss in household balance sheets (with another $6 trillion loss probably in 1Q09), the highest inventory-to-sales ratio (at about 1.8) and $1 trillion in excess capacity in the economy, we are likely going to see decreased consumer spending going forward. This is going to be the worst part of the recession for the consumer and the recovery still seems a few months away from a fundamental level.

All that being said, one thing that could keep the rally going is corporate earnings. As earnings season approaches in April, it should help paint a better picture of what we can expect going forward for the economy and the stock market. Hopefully earnings come in better than expected, but I am not convinced yet.

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My Note: The current rally is a great big “Bear Trap” “Sheeple Beware! – More Tomorrow- jschulmansr

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· Who’s been driving this record bull-run in gold?

· What Happens When Inflation Kicks In?

· Why most investors are WRONG about gold…

· When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault

=========================================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. – jschulmansr