ROBIN IS STILL WAITING FOR A BEAR MARKET RALLY.  THE MARKET CONTINUES TO FALL BUT HAS SHOWN REMARKABLE STRENGTH IN THE FACE OF SOME MISERABLE ECONOMIC NEWS.  THE MARKET’S REACTION TO RECENT LOWS IS SURPRISINGLY COMPLACENT AS EVIDENCED BY A LACK OF REACTION IN THE VIX (SEE THIS WEEK’S COMMENTARY).

THIS HAS BEEN A NEWS DRIVEN MARKET AND HAS MADE TECHNICAL ANALYSIS EXTREMELY DIFFICULT.  WHEN EXPERIENCING THIS TYPE OF MARKET, TRADERS NEED TO BE ESPECIALLY NIMBLE BECAUSE IT BECOMES ALL ABOUT REACTION TO EVENTS.

Monday, the market tanked in fear of Bank Nationalization rumors, finishing lower by 251 points in the DOW.

Tuesday regained most of Monday’s losses due in large part from positive comments by Bernanke allaying fears that Bank Nationalization is on the horizon.  Ben also predicted a shorter recession, which led to a 236-point gain in the DOW.

Wednesday saw continued trepidation regarding Bank Nationalization despite Obama’s upbeat address before Congress on Tuesday night.  Treasury began “Stress Tests” of the Banks as the DOW sold off 80 points.

The market put up a good fight Thursday despite bad GM news and other negative economic reports.  The DOW gave into selling pressure and finished down 89 points.

The week mercifully ended with a 119-point loss on Friday, due to a horrendous GDP report and news that Citi will now be 36% owned by the government. 

2009 has had an absolutely abysmal start with the DOW dropping over 2000 points from the first of the year.  Week over week, the DOW was down 303, the SPX off by 35 and the COMPQ worse by 63.  We broke critical support levels this week, most notably, the 741 low from November 21^st on the SPX.

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