Market Observations 03/07/08

Resistance: DJIA 12000 (650DMA); SP500 1330 (800DMA); NAZ 2280 (900DMA); NDX 1755 (700DMA)

Support: DJIA 11750 (800DMA); SP500 1275 (1100DMA); NAZ 2185 (1200DMA); NDX 1670 (1000DMA)

SP500 gap down 1304 to 1301, rise to 1313, plunge to 1282, close 1293. NDX gap down 1712 to 1701, rise 1731, plunge 1682, close 1707.

SAT: a close below SP500 1325 spells BIG trouble.

Earlier this week: We sense poor non farm payrolls could kick this dead man walkin down another BIG flight of stairs.

THU: Strap on your crash helmet, negative jobs sends SP500 to 1270 fast.

We are there on all counts, just shy at 1282, the market bounced and sits on the January lows.

NDX & OEX made new lows for the year, but these lows are not on high volume like 01/23; and the internals suggest a very bearish bias.

Next week Thornburg Mortgage will be BK. We don't know how far behind WaMu or for that matter Wells Fargo is.

Last year, Wells bought $140 billion of WaMu's mortgage servicing portfolio which represents about 1.3 million servicing customers.

This boosted Wells Fargo's servicing portfolio to 7.5 million customers and $1.3 trillion.

Since the acquisition, Wells portfolio seems to have gone sour along with their 10Q's. Speaking of which, the truth will be known in May.

The TED spread doubled in two weeks while the Yen went to 102, indicating a massive leveraged carry trade unwind, a liquidity crunch and worsening solvency issues.

The market needs a bounce off 1270 next week. We are one straw away from breaking the camels back.

Often wrong, but never in doubt, this is the Nattering Naybob and you're not.

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