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January Rain
Investors are anxious to start a new month today after stocks posted their worst January ever. According to the New York Times, the Dow Jones Industrial Average dropped 8.8% last month, while the broader S&P 500 fell 8.6% as earnings forecasts were cut and the economy deteriorated at a much faster pace than analysts had feared.
Perhaps even more alarming is the so-called January Barometer - the theory that the performance for the month of January is a good indicator of how stocks will trade for the rest of the year. This has held true in 60 out of the last 80 years according to S&P analyst Howard Silverblatt. For context on the bigger picture, see Professor Bennet Sedacca’s Crisis of Contagion Hits Wells Fargo? 
From the Bull Pen: The likelihood of a countertrend rally very possibly hinges on the speed of the passage of the economic stimulus plan. Until then, bulls can consider plays in silver, particularly the ETF (SLV). One may be able to catch the stock on a pullback to $12.
From the Bear Cave: Consumer discretionary stocks will have trouble outperforming. Consider RadioShack (RSH), possibly headed toward $10. A buy stop can be set near $11.80-$12.
Quick Check Around the World
Asian trading closed with the Hang Seng -3.14%, Nikkei -1.50%, Sensex -3.79%, Taiwan 0.28% and Shanghai 1.06%.
Glancing towards Europe, we see the CAC -2.35%, DAX -1.96%, FTSE -1.66%
As of 8:00 a.m. EST, S&P futures are trading -13 to 809.00, and Nasdaq futures are -21 to 1158.00.
A Look At Commodities
Crude oil is trading -1.54 to 40.14. Gold is -18 to 909.10. Silver is -0.26 to 12.330, and copper -2.30 to 144.55.
The dollar index is +0.4050 to 86.8650.
On the Radar
Economics
08:30 Personal Income -0.4%
08:30 Personal Spending -0.9%
08:30 PCE Deflator (YoY) 1.1%
08:30 PCE Core (MoM) 0.0%
10:00 ISM Manufacturing 32.8
10:00 ISM Prices Paid 18.0
10:00 Construction Spending -1.2%
Click here for the full trading radar.
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