Market Soapbox 02/26/07

MON, 4th day down, DJIA -15 on lower volume with poor internals. All DOWN cept XMI, XOI, XAU, DJUA. Bonds up 10 yr -4bps 4.63, $ down vs 1.3184E & vs 120.575Y, WTI crude up $61.53, gold up $689.70.

Since hitting the magic number 1794 on 11/15/06 the NDX has waved sideways and struck 1794 again on 02/15/07. At the moment, 1794 is a magnetic number.

Sub prime worries may be spreading as the AMEX Major & OEX which have been skidding since peaking 02/14. Note the parabolic rise in the MID & RUT since 01/08/07, these two have been little phased by the financial sector woes.

Since hitting DJIA 12800, RUT 830 & SP500 1461, around 02/20 the markets have skidded. Our scenario of a fall to touch at 1445 played out today, rebounding to 1449 at close.

If the market retains its form, today's late bounce should play out into either a morning upsurge...or a morning trek down to 1440, from which a nice upsurge would start.

Be on the look out, two days closing under 1445 accompanied by further NDX, NAZ, OEX & AMEX Major slippage, along with a significant breakdown in the MID & RUT would signify a change in market sentiment and direction.

Sans this occuring or the introduction of an agent of change, its still thumbs up and headed for SP500 1510-1520 in the near term.

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