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January 13, 2009

Midnight Briefing

Another late night post and a brief one at that. I've been entertaining this evening and now have a bit of a headache to fight. (I thought hangovers didn't start until the next morning?) Besides, not a heck of a lot changed with today's session. The S&P 500 put in a bit of a spinner and closed with a whopping one handle gain.

stock index chart

I think there is a fairly good chance equities creep higher for the next few days, particularly since we have an opex directly in front of us. How the internals play out during this creep will tell us a lot about whether the rally will last or whether we dive. On the other hand, if we continue to fall directly, it would be a very ominous sign. I have started to dabble on the short side (AZO, GDX, RPT), but I won't turn on the afterburners until I see what I want.

Gold posted a narrow-range session, as anticipated. The chart looks like its been hit with a bag of nickels. I suspect we are going directly lower. Maybe... just maybe... our little yellow friend will squeeze in another NR session, but I'm pretty much expecting a significant break of gold's trend line presently.

gold chart

The banks once again flirted with a new closing low for the bear market before managing a minor recovery, and internals have come off extremes just enough to make room for a small rally... a rally that may well be a death lurch rather than a bounce. Stay tuned.


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