The S&P is down again to start a new month. The technicals remain mixed in that the monthly charts are extremely negative but with substantial risk for a correction, the weekly charts are more positive suggesting a possible correction to the mid 900's, and the daily is currently negative. 850 seems to be the middle of the range develeped since mid November with no real indications that is going to change.
The market reminds me of the timeframe when Bush and Gore were in the disputed election. The market traded day to day based on comments and progress on the legal settlement. Now we are trading on day to day progress and comments on the stimulus and Tarp plans. The more the market focuses on the problems and the divide in government response, the more bearish the market trades. When optimism builds over any solution, or even something resembling a plan, the market firms up. I think the maket will eventually trade up as a result of the inevitable stimulus/Tarp action in the next few weeks to 900+ in the March S&P. If that does take place, however, it will only look like a better opportunity for bearish trades.
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