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MV Weather Report: Severe Storm Warning for GE


Rain or shine, we review the day's biggest stock stories.

It was another up and down day on Wall Street: Markets basically closed flat for the day. The tape was controlled by Washington and its dual talking heads, Bernanke and Geithner. Today on Capitol Hill, Geithner said the US needs to reduce its massive debt, while Bernanke said he backs the government's strong action to stimulate the economy.

As for the S&P 500, it closed at 696, which is a new closing low, as well as a new low for the current bear market. The market seems to be in its own mini-crash here. Not as bad as October/November - but the knife is certainly falling.

On the Buzz and Banter today, Jeff Cooper talked about cycles of 7.

"If this 693 S&P level doesn't hold up then the index projects to 661ish which is interesting as it is a full 7 cycles or squares down from 1576, the all time S&P high.

"It would be somehow fitting if a scary plunge 7 cycles in price down from the high marked a panicky crescendo. But, even that is Boo's agenda, there may be a move first that suggests a low has passed.

"Interestingly, 661 resonates off the date of July 4 near the date of the 'orthodox' high in July 2007."

Oddly enough, the S&P at 692-ish was the low for the day, which means 693 successfully held. I would keep Cooper's 661 projection on your radar - this sell-off could find near-term support around that level.

Heads up tomorrow as traders will be looking at Costco's (COST) earnings and economic data (Challenger Job Cuts, ADP Employment, and ISM Non-Manufacturing Composite). The Fed's Beige Book is also out; it's typically the kind of release the can move markets.

Not familiar with the Beige Book? It is a collection of current economic conditions. The data is collected by Federal Reserve banks as they interview economists, market experts, business contacts and others.

I would also keep General Electric (GE) front and center on your screen. The stock goes down literally every day. It's trading like somebody knows something. Bill Feingold explains:

"As in the past, I suggest General Electric (GE) is the poster child, and the stock and credit are trading like something big, if not quite on the order of AIG, is rapidly approaching.

"Thinking along these lines, I have rolled my GE June 5 puts forward to March, taking roughly the same dollar premium to triple the size of the position. I'm short some stock as well, but the bet is that with the embarrassment that is AIG (AIG) having caused the latest big leg down, GE is very much on the clock."

Tonight is Minyanville's latest karaoke event. Terry Woo and I will be signing a duet together - Youtube video to come.

Have a great night, Minyans!
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No positions in stocks mentioned.

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