... The S&P 500 index closed at 1,433.06 39.14 on credit-market-related concerns and a weak jobs report. With technical support at 1450 long gone as confirmed by Dartline on 08.02.07 " ... Only a few point separates technical disaster from the index falling below its 200-day moving average at 1450, and therefore too much uncertainty for the market to trade up with conviction, " the next important test would be 1313.35 last hit on 09.05.06. The current action of the index suggests a recession starting in late 2007 and lasting through most of 2008 based on a 15% contraction on S&P 500 per share earnings to mimic a market decline of 12%-15% as during 1974-1975 and 1990-1991. Based on the anticipated scenario, the S&P 500 index could weaken to 1233, representing a 271 point decline from 1450. Before Dartline can test this forecast the index may find temporary support at 1313, and if it does occur would be a buyers' trap. ... It would be prudent to step back and assess from the perceptive of history - you know, the sum total of things that could have been avoided. You only need to review the positive things that have taken place over the past few years in the market, whether its private-equity, share buy-backs and earnings, such dynamics can be traced to an easy money environment. Thus, what companies are reporting now is less relevant than future guidance. Indeed, very few S&P 500 companies have issued forward earnings during the second quarter, which suggests a growing uncertainty about the near-term and mid-term prospects. A growing number of market strategists and economists are again suggesting that the slumping housing market, and now a possible credit crunch, have the potential to severely impact the U.S. economy, and even possibly tip it into recession - the new word for depression. ... Since global growth and liquidity are critical factors fueling U.S. multinationals, which has overcome domestic economic and credit woes, key data on second-quarter productivity and labor costs, both important gauges of inflation and growth, as well as June consumer credit data will be published on Tuesday. June wholesale trade figures will be released on Wednesday. ... Reduction in the prime interest rate? Problems in the subprime mortgage market have spread into other parts of the home loan market, causing the private and secondary mortgage market to freeze up, and limiting the availability of home loans. Contraction of leveraged-loan and high-yield debt markets, widening corporate credit spreads and derailing financing for leveraged buyouts may encourage the Federal Reserve to cut interest rates. Indeed, the central bank can alleviate the stress on equities and bailout the bulls. Don't bet on it! The Fed cannot move to lower rates and is forced by external circumstances to maintain it at 5.25%. Even a quarter point downward adjustment would further weaken the already troubled U.S. dollar and set off hyper-global inflation, while materially reducing U.S. exports, hiking values for commodities and imports into the U.S.

... August 4, 2007, 7:30am .... from a member

.. Stanley Inc. proved to be a good trade. What do you think of ... . YHOO @ 31.45, NYX @ 97.70, NMX @ 145.13, MSFT @ 30.65 and WMT @ 49.52. These stocks represents my largest positions and need your thoughts. I have a managed account with a major brokerage house and so far  this year I'm down almost 21%. I gave him a copy of your July 30 Dartline about the market going lower, he said the website was not known to him and I should rely on his judgment. This afternoon I asked him who was right. He still believe that the market looks good. From what I see he's dead wrong. 

... August 3, 2007, 7:30am .. The Standard & Poor's 500 Index finished at 1,472.20, 6.39 points as stocks rallied late based on strong profits that temporarily offsetting credit concerns. With the index at the top of 1450 to 1472 trading range, the market has sufficient momentum to test 1490, last hit on July 7th. Use the bullish enthusiasm by taking profits, eliminating laggards and accumulate cash. Stock lack the necessary dynamics for a sustained upside, nor is the economy sufficiently positioned to insure future corporate earnings growth for the next three quarters. ... With the U.S. stock market's advance, the dollar rose against the yen, which reduced pressure of the carry trade. The dollar must strengthen further to insure moderate liquidity in the international markets and keep oil prices from rising higher. ... The Reuters/University of Michigan's consumer sentiment index rose to 90.4 in July, down from the early-month reading of 92.4 but a big bounce from June's 10-month low of 85.3. Yet, there's more evidence that shoppers are tiring as consumer spending - the most important element of the economy - rose only 1.3% in the second quarter, down from a 3.7% in the first. Housing activity keeps falling as residential construction continues to drop, and reduce GDP growth by three percent. Right now the delicate balance between jobs, wages and equities are being offset by higher energy price and weakening consumer liquidity. Further weakness in consumer spending would make equities expensive and subject them to a deeper correction. Beware of the October winds.

... August 2, 2007, 7:30am ... S&P 500 index closed at 1,465.81 10.54 to create a technical base to build further gains from. Stocks ended a wild ride solidly higher as the final hour provided an opportunity for bargain-hunters to jumping into an oversold market after a choppy day fueled by discomfort over the shaky housing and credit markets. Whether it lasts is immaterially providing you focus on the technical indictors of 1450 to 1472. The S&P needs upside confirmation from 1472 to warrant a long bias. ... Factory growth in United States slowed more than expected in July, while a key housing statistic appears suspect, created further anxieties about the economy.The Institute for Supply Management reported that its U.S. manufacturing index slid to 53.9, down from June's 14-month high of 56 and below Dartline's projection of 54.3. Look for further weakness in the next three quarters and the only reason why the number isn't lower remains the war in Iraq.

... August 1, 2007, 3:50pm ... The S&P 500 closed at 1,465.81 10.54 +0.72% and insured support above 1450 when the level was covered. .... The S&P 500 index is below the 200-day moving averages at 1445.09, representing a major sell signal. ... 7:30am ... The S&P 500 Index closed 1455.27 18.64 (1.26%), as 1472 becomes the new upside test. Only a few point separates technical disaster from the index falling below its 200-day moving average at 1450, and therefore too much uncertainty for the market to trade up with conviction. Use patients, take profits, reduce positions and conserve cash is the game plan ... Liquidations from U.S. stock funds totaled $3.03 billion in June, versus $10.1 billion in May. Cash in stock funds at the end of June stood at 3.6% of assets, about the same as in May and near the low end of the range in recent years. Not a current problem, yet one that can create a major selling wave if investors get a bit more nervous, especially as crude oil topping $75 a barrel heading towards $100. ... Crude oil futures climbed above $78 a barrel , a record closing for a benchmark contract on the New York Mercantile Exchange. The previous record close was $77.03, recorded July 14, 2006. ... August reformulated gasoline climbed 5.52 cents, or 2.7%, to close at $2.1408 a gallon, and August heating oil ended at $2.10 a gallon, up 3.49 cents. September reformulated gas closed up 4.67 cents at $2.1059, while September heating oil added 4.01 cents to close at $2.1232. Right now, consumers have not been fazed by high prices at the pumps. What would the deal be at $81-$82.50 within the next 30 days -- (without a supply disruption from any geopolitical or weather event) --? The consumer will suffer, not only from the pumps, but indirect costs from a goods or services relying on petroleum. Hyper-inflation will make subprime loan delinquency a mere hiccup.