Stock Market

Over the past week, the market has staged a furious rally off the
11/20 lows, with the SP 500 having risen 19.1%. It was a good
week for very short term traders looking for upside action. The
action remains to0 violent for me, and I look toward next week
to see if a more sustainable pattern may develop or whether this
surge up is just another ill fated rocket in an ongoing deep bear
market. I learned the hard way long ago to be very wary of
spike bottoms, period.

Short term, the market is graded neutral, having quickly overcome
a deep oversold. Upmoves of substance do get overbought rather
quickly, but the higher ground is not given up easily. So, it remains
to be seen whether this latest surge may have some meaningful
staying power. It would be helpful as well to see stronger upside
volume. Looking out 10 - 13 weeks, the market remains heavily
oversold.

The last deep downdraft, which took the SP 500 to a low point of
752 on 11/20 carried the market down over 50% from the 10/07
closing all time high of 1565. It galvanized the Fed into further
supportive action, and brought the Obama team out in a hurry to
promise a decisive, positive fiscal policy response come inauguration.
That the Christmas shopping season kicks off this week is, of
course, purely coincidental.

When it comes to the stock market, or any market for that matter, I
am by disposition not a nibbler when it comes to investing. It's easy
enough to nibble on the long side in top quality companies in a deeply
discounted market. Not my style. Either you like the market or you
don't. In that regard, I continue to watch credit quality spreads and
the trend of lesser light fixed incomes carefully.