Market Soapbox 02/10/06

Resistance: DJIA 10950; SP500 1285; Nasdaq 2315; NDX 1730
Support: DJIA 10750; SP500 1250; Nasdaq 2245; NDX 1650

Volume:
NYSE +784M -894M Total 1.7B Hi 91 Lo 35
NAZ +1.1B -813M Total 2.0B Hi 88 Lo 33
AMEX +23M -50M Total 76M Hi 31 Lo 10
BBOTC +1.3B -318M Total 2.5B Hi 172 Lo 102

In our top story tonight, Generalissimo Francisco Franco is STILL dead. In other news, Trade Balance -65.7B vs prior -64.7B, Treasury Budget +21B vs prior +8.6B showing a larger current account deficit, but perhaps a smaller budget deficit.

Oracle giving forward looking reassurance and cutting 2000 jobs. Volkswagen giving a glowing report and cutting 20,000 jobs.

Recent DJIA History: 20 weeks ago, -270 breaking key support, 19 weeks +148, 18 weeks -281, 17 weeks -6, 16 weeks -77, 5 week loss -486. 15 weeks recovery begins +186, 14 weeks +128, 13 weeks +154, 12 weeks +79, 11 weeks +165, 5 week gain +712.

10 weeks -53, 9 weeks -99, 8 weeks +99, 7 weeks +8. 6 weeks -168, 5 week loss -213. 5 weeks +242 on a broadbased new year buy in, 4 weeks +0, 3 weeks -292, 2 weeks +240, 1 week -113. 5 week gain +75.

Mon, DJIA +5, Tues, a broadbased slapdown, DJIA -49. Wen, a big bounce DJIA +109 on higher volume with pretty internals. Thur, DJIA+ 25 on lower volume and midlin internals.

Today, DJIA +36, same volume, same internals as Thurs. This week DJIA +116, over the last 20 weeks DJIA +196.

DJTA, NDX up. MID, NYSE & RUT weak, SOX, XAU & XOI beat down. CAC, DAX & FTSE down, Hang Seng up & Nikkei 225 down BIG.

Sectors: Gold Bugs, Oil, Pharma, Commodity & Semis beat down. Biotech, Telecom, Transports, Tobacco & Banking up.

Dollar up vs. Euro & down vs. Yen, XAU & gold down BIG @ 550, XOI & crude down BIG @ 61.84, CRB commodities down.

Yield curve MAJOR INVERSION bonds down with the 30 yr yield rising @ 4.55%; 10 yr @ 4.58; 5 yr @ 4.58; 2yr @ 4.68; In shambles, now a full tilt boogey.

Looking ahead at potential market influences: Feb 14: Retail Sales, Business Inventories; Feb 15 Empire State, Net Foreign Purchases, Capacity Utilization, Industrial Production, EIA Inventory, Bernanke's Testimonial before Congress; Feb 16 Building Permits, Export Prices, Housing Starts, Import Prices, Initial Claims, Philly Fed; Feb 17 Mich Sentiment; PPI, Core PPI.

Yesterday: "the lack of followthrough is very discouraging." It seems there is a massive flight to safety in defensive stocks as the RUT, MID, SOX, NDX & NAZ have suffered while the DJIA is popping up.

Since 1/11 Google has gone from 475 to 362, on 2/1 afterhours from 432 to 360. The pattern looks like a classic pullback, we think 300 is not out of the question. Gold has suffered a similar fate, pulling back to 500 would not be a surprise.

The energy sector and commodities have also been getting beat about the head this week with Oil going from 70 to under 62 while Natural Gas tanked. All this behaviour telegraphs expectations of a major slowdown in consumer spending.

Todays NDX low of 1637 is getting close enough to 1630, we are watching closely. Next Wend, we expect an inflection point in the market.

Keep it tween da ditches, we take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong, this is The Nattering Naybob and your NOT!!!

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