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The next day


It really is unbelievable how cold the eastern part of the country is right now. A foot of snow in the Outer Banks. Can't you just hear the children asking; "hey Mom, can I go down to the sand dune to go sledding?" Pretty soon the next thing you see will see cats sleeping with dogs and the Raiders will be in the Superbowl. I wonder if Toddo went to San Diego just to escape the weather and hang with Casey. Like I said pal, watch out because I may be folically impaired, but I am scrappy!

Back to the markets. Yesterday was a good day in both terms of price, volume and breadth. The strength was on the back of some ok numbers from corporate America and traders buying that there wouldn't be six down days in a row. It was a pretty good bet yesterday. I highlight yesterday because it is over. If one of the reasons to buy was that there were too many down days in a row, that reason has now been removed.

That leaves us with better earnings news. Again, that was yesterday. Today traders and investors alike must respond to last night's numbers, which were decidedly mixed. I don't need and Wall Street research to tell me that, I just need to watch the futures market. Mixed after a string of down days can create an environment ripe for a bounce, but follow through is needed because despite recent weakness, my indicators are not yet at oversold enough levels to suggest a rally back to the upper end of the trading range is likely.

The stochastics Toddo and I mention are no longer overbought but have not reached deeply enough into oversold territory to get the trading community licking their chops. Another couple of mixed to lower sessions would change that, but it seems a little early to make that call.

The problem is that the issues surrounding the tape remain and now the weak dollar is picking up the chatter lead. The dollar chatter should create commentary about those stocks that could benefit from a weak dollar, including multinationals and tech companies. Careful though, the positive sentiment there could be offset by dollars leaving the US markets to avoid the currency risk. Wouldn't that be minxy? Earnings go up because of increased demand for US goods and currency translation, yet stocks go nowhere due to flow of funds pressures keeping valuations in check. Minxy indeed.

We are going to have to play this one by ear and I will try to get you an update from San Diego where the real contrarian bet is to get an autograph from someone on the Bucs. Wasabi Jeff.
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