Merry Christmas

Merry Christmas & a happy holiday season from all of us to each of you. It is my fervent hope that your 2009 is filled with happiness and prosperity. Peace and God Bless!

Game Plan: Trades

Game Plan: I think 2009 will be a much better investment year. However, I also think it will likely be back end loaded with most of the gains coming in the 2nd half of the year. {see previous An-tSionna} Note though this is just my opinion and since I am prepared to be wrong I can change my view on this quickly if I have to. I think that we will have a two sided basing market during the first 6-8 months and am prepared to trade a bit more than I might normally for client accounts depending on their investment parameters and risk criteria. As such, and in light of the fact that there is likely to be some sort of end of the year rally, I have put on certain trading longs in certain ETFs over the past 2-3 trading days.

An tSionna-Calculating Moving Averages.

One of the simplest ways to mark the beginning and end of the market's current phase is when it's 50 day moving average crosses it's 200 day moving average. A moving average simply averages the closing prices of the period in question and forms a continuous line. Investors use this 50/200 cross (sometimes called the Golden Cross) as an important tell on market direction. A 50 day average looks back about 2 1/2 months. A 200 day average looks back 10 months. Time is currently in the process of dropping the worst of the fall's decline as that is now farther back than 50 trading days on its moving average. Also as we've noted in the past we have now been basing for about tow months. We still have a lot of work to do regarding the 200 day as it is currently still averaging trading numbers going back to late February. I took a stab at calculating when these two might cross if the market continues to flat line or base in its current trading range. These are the dotted lines you see pictured in the chart above. (50=green. 200=dark red) Assuming we mostly trade sideways then it's likely these averages don't cross until sometime in the summer. That means no new bull market is likely to begin until then. That would coincide with a late year pick up in market activity that many analysts are looking for. Note though this assumes that markets continue to base for the next 6 months and don't move rapidly higher or lower. Then we would have to recalculate. Stay tuned.

Happy Hanukkah

Happy Hanukkah. Best wishes and prosperity for 2009.

End Of The Year.

We're entering the crazy end of year season and I'm going to be gone for a bit after Christmas. Expect postings to be light/sporadic/nonexistant between now and the end of the year.

We'll pick it up again in January. 2009 will be a better year and I'm going to start highlighting why I think that shortly after the new year commences.

Things To Consider.

Things I've seen or recently been told that are worth pondering.

1. Every $10 drop in oil saves the economy roughly 175 billion. Oil has dropped about $10 alone in December. Source: Real Money {Subscription required}

2. Total Industry car sales in America this year are expected to be 10.5 million units down from 17 million in 2005. This on a per capita basis is the lowest since World War II. Source: Washington Post.

3. Over the past three months consumer prices (largely I'm guessing from the rapid decline in gasoline) fell at their fastest rate since the Depression. Source NY Times.

4. Yale University's endowment loses more than 25% in 2008 (don't know if this is a year to date number or a beginning of fiscal year number). Source: Yale Daily News.

5. Grumpy says stocks are bottoming and the economy will bottom this summer. Grumpy is usually off by 6 months. ;{

6. Gracie has a client who lost 2 million with Madoff. She thinks the client may become suicidal over this type of financial loss(more on this at a later date).

7. Several of the Boston Boys have lost their jobs in corporate restructuring.

8. If S&P* does rebound and gets towards an $80 earnings run rate in the 2nd half of the year then is S&P 1100 possible by year end 2009? That's over a 20% increase from now if it happens.

*Long various ETFs related to the S&P 500 for clients and personal accounts.

Coaineadh Na dTri Muire

My heart today goes out to my client H.R. (We don't use names here but she'll know who she is) on the recent passing of her husband.

H.R., "Iompruíodh gach éinne a chrosa, a Mháithrin".

The Curse Of Money

This from Tony Crescenzi contributor @ Real Money & Economist over @ Miller Tabak & Co., LLC.

"Having reached the lower bounds of what it can do with short-term interest rates, the Federal Reserve has essentially put a "curse on cash," in hopes that cash will ultimately be viewed as a weak alternative to other investment choices, from lending to investing.
Banks, for example, had been increasingly turning to securities to place their cash rather than use the money to lend. This is apparent in the Fed's weekly report on the assets and liabilities of commercial banks, which shows that banks increased their securities holdings by $338 billion to $2.804 trillion just over the past three months. Obviously the Fed would rather banks lend the money, where it would then multiply, expanding the money supply and supporting economic activity.
There is of course abundant evidence that institutional investors have also been shy about investing. One gauge is institutional money funds. Data from the Federal Reserve indicate that institutional money funds have grown by about $200 billion over just the past two months, to $2.278 trillion. The curse on cash could eventually push return-minded institutions to take more risk. Individual investors will lag, as usual.
The "curse on cash" theme is one that will likely increasingly affect the decisions investors make. The Fed is sure to reinforce the theme whenever it feels it is necessary, until people begin to take risks again. It would be risky to challenge this curse in light of the Fed's firepower. The downside of the Fed's actions -- inflation, potentially, and a free-market system that is not exactly working as well as a free-market system should -- are for another day, or year."

http://www.thestreet.com/b/rmoney/tcrescenziblog/10453812.html (subscription required.)

Fed Statement. Important Points Highlighted.

The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.
Since the Committee’s last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.
Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.
The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.
The focus of the Committee’s policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve’s balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity."

This statement is a net positive for recovery. The Fed is telling you that they're going to do what they need to do to get economic recovery into 2010. Next up will be the O'Bama stimulus package. Stocks are flying on this news!

No Posts Until Next Week

I'm out until the 1st of the week. Nothing until beginning of the week!

Ecuador Defaults on Bonds

Unintended consequences of the rapid fall in the price of oil.

From Bloomberg: Ecuador Defaults on Bonds, Seeks Restructuring

"Ecuador won’t make a $30.6 million bond interest payment due Dec. 15, putting the country in default for a second time this decade, President Rafael Correa said. ... His decision comes as a deepening global economic slump throttles demand for oil, the country’s biggest export. Ecuador, which defaulted in 1999, owes about $10 billion to bondholders, multilateral lenders and other countries.Ecuador exported about 400 thousand barrels of oil per day (2004 data) so the recent $100 per barrel drop in oil prices would be about $40 million per day less revenue. Other oil exporters will have problems too, although many oil exporters have significant foreign reserves."

50 Day Moving Average-Potential Bright Spot?

Two different images of the 50 day moving average. That is in it's simples form an average of stock prices plotted on a line over a certain period of days. The chart to the left shows this in days and the chart to the right shows it in hours. Note how both of these have started to level off.

Traders & investors generally view securities trading above their 50 day moving average as bullish. A change in sentiment is important if markets are going to trade higher on a consistent basis. By the end of next week the S&P 500 will have dropped virtually of it's fall decline as shown in the chart on the left. This will enable the it's 50 day moving average to flatten out. Stocks should test this line at some point soon. The S&P 500 has not traded above it's 50 day moving average since May 30, 2008.

*Long ETFs related to the S&P 500 in various client accounts.

Game Plan: Current Ideas on Allocation.

Game Plan

Allocation

These are my current thoughts on asset allocation that we have incorporated into the game plan. First the usual disclaimer for non-clients of our firm: Game Plan sections involve our ideas on investing that we have previously either enumerated with our clients or are based on long lasting relationships and information they have communicated to us about their unique risk/return profiles. Therefore we make no specific recommendations nor do we in any way imply that anything regarding this investment profile would be appropriate for casual readers of this blog. Non-clients of Lumen Capital Management, LLC are advised to do their own investment research or discuss any of this with their own investment advisors. Furthermore these investments are subject to change without our notifying you of any change of investment opinion on our part.

With that said here are our current ideas on sector allocation. We will not give out the names of any of the individual securities that we are purchasing. Most of these purchases were done using Exchange Traded Funds.

Major Market Indices:

Dow Jones Industrials

S&P 500

Nasdaq Composite

Income Related Securities:

Preferred Stock ETFs

Corporate Bond ETFs

High Yield Dividend ETFs

Market Sectors {Sectors we expect to outperform the markets in early 2009}:

Certain Technology

Certain Financials

Materials

Energy

Biotechnology

On one last note: Many of these sectors have had significant moves recently so I would not necessarily advocate following our methodology at this time on your own.

Charles Schwab On The Uptick Rule.

Charles Schwab has an editorial in the Wall Street Journal today regarding the uptick rule. We've discussed this before ourselves most recently here: http://lumencapital.blogspot.com/2008/11/bring-back-uptick-rule.html

Here's an excerpt. You can read the whole thing at the link at the end.

Restore the Uptick Rule, Restore Confidence
Short sales of stocks are fine given one tried and tested regulation.

By CHARLES R. SCHWAB

"The last time the stock market suffered from extreme volatility and risk of market manipulation as severe as we are experiencing today, our grandparents' generation stepped up to the plate and instituted the uptick rule. That was 1938. For nearly 70 years average investors benefited immensely from that one simple stabilizing act.
Unfortunately, in a shortsighted move, the Securities and Exchange Commission (SEC) eliminated the rule in July 2007, just as we were about to need it most. Investors have now been whipsawed by what appears to be manipulative trading, what we used to call "bear raids," which drive stock prices down without warning and at breakneck speed. Average investors feel the deck is stacked against them and are losing confidence in the markets.....

......The uptick rule may seem far from a kitchen-table issue, but it is critically important to ordinary investors. With more than half of all U.S. households invested in the stock market, either directly or through a retirement plan, it matters a great deal. The average 401(k) retirement account has lost 20%-30% of its value over the last 18 months -- more than $2 trillion in retirement savings has been wiped out. Behind those numbers are real people who planned and saved, and who are suddenly facing an uncertain retirement and the prospect of working longer......

......In the wake of the Great Depression, the uptick rule was established to eliminate manipulation and boost investor confidence....... The rule said that short sales could be made only after the price of a stock had moved up (an "uptick") over the prior sale. This slowed the short selling process.....In July 2007, however, the SEC repealed the uptick rule after a brief study. Manipulative short sellers couldn't believe their luck......The SEC's study took place during a period of low volatility and overall rising stock prices in 2005 through part of 2007 and didn't anticipate the kind of market we are experiencing today. .....Without this vital control mechanism, short sellers have been having a field day, betting heavily on lower prices and triggering panicked investors to sell even more.

Don't get me wrong. Legitimate short selling where a trader has borrowed shares for future delivery and believes those shares will lose value over time plays an important and stabilizing role in our markets. It provides a check on overexuberant prices on the upside, and provides natural buyers on the downside. The uptick rule, however, prevents short selling from turning into manipulative activity. Reinstating it will help smooth out the markets and reduce the speed of price drops. It will limit the ability of a small number of professional investors to trigger fast dramatic price drops that create panic among investors......

.....The SEC has an opportunity to make a real difference in helping to control future market stability and restore confidence in the fairness of our capital markets. But the SEC has been strangely silent as the crisis has worsened.......Regulators should act quickly to establish a framework and solicit public comment, then reinstate the rule and remain flexible and willing to fine tune it if necessary.

Ordinary investors' expectations for investing are reasonable. They want a fair playing field. They want to be successful. They want to provide for their families, support their children's education, have a comfortable retirement, and maybe even leave a little bit for future generations. But they can't succeed when the markets are gripped by fear and manipulated by those who want to profit from that fear, at the expense of everyone else.
It may be too late for the restoration of the uptick rule to have much impact on where we are today. But there is no reason to wait and we need the protection in place for the future. It is time to restore it."

Mr. Schwab is the founder and chairman of the financial services firm that bears his name.

Here is the full editorial Link: http://online.wsj.com/article/SB122878208553589809.html

Bond Auction

4 week Treasury Bills auctioned off today with a yield of 0. That's right folks you get nothing for giving your money to the government. What was that old chinese curse? "May you live in interesting times."

Breaking News!

Gov. Blagojevich of Illinois taken into custody by the Fed's from his home this morning. As they say in the movie Mystic River, "He went in the back seat if ya know what I mean!"

We don't know why he was taken and we don't know if he'll be charged with anything. He and his office have been investigated by the Feds for years. If at some point he's tried and convicted I think Illinois would be the first state to send back to back Governors to jail.

Misson Control

Somebody asked me the other day what my office looked like. This is Mission Control from a few years ago. It looks essentially the same but more cluttered.

Here are some of my assistants hard at work! They too are a bit older than when this was taken!

An tSionna: Breakthrough?

Did the Panzers break through the Maginot line today? By any trend line measure, the S&P 500 {here represented by SPY} broke through all of its downward trend lines as measured from where the market began its sell off back in September. Volume was not great but the market held most of its gains from Friday and tacked on more in a generally positive day. If there is a successful test of these lines in the next several days or weeks then it is likely that stocks will make a run for the next level of resistance which is just around 100. One other thing to note is that stocks have basically now based in a broad range since early October. Stay tuned!

*Long certain ETFs related to the S&P 500 for client accounts.

Who's Dancing Now?

Sam Zell is a well known Chicago financier who long ago earned the nickname the "Grave Dancer" for a seeming uncanny ability to buy real estate and distressed businesses, turn them around and then sell them. In 2007 Zell sold his Equity Office Properties to Blackstone Group near the top of the real estate market. Zell also bought the Chicago Tribune Group last year taking it private in the process. Today though the Grave Dancer found he was on the other side of the trade as The Tribune Group declared Chapter 11 bankruptcy.

A company memo tried to explain what had happened. "It has been, to say the least, the perfect storm. A precipitous decline in revenue and a tough economy have coupled with a credit crisis, making it extremely difficult to support our debt. All of our major advertising categories have been dramatically impacted."

Zell is one of the smartest guys in the room and even the best make bad trades. Also I can only summarize here and there's obviously more to this story. But it is just another example of a smart fellow who didn't see it coming and took on too much debt in the process.

Who Saw This Coming

Who saw this whole financial crisis coming?

Not Warren Buffett. Berkshire's holdings have had as lousy a year as the overall market. He is also significantly underwater in the holdings he purchased this fall in General Electric & Goldman Sachs. (For the record it is worth noting that Buffett is the longest of long term holders).

Not General Electric. They were buying back their own stock earlier this year when it was in its 30's and had to sell stock in the teens and 20's.

Not Bill Miller over at Legg Mason. He's down over 50% this year.

And certainly not Citadel Holdings the big Chicago Hedge Fund Complex. They lost 13% in November and are down 47% year to date.

*Long General Electric in certain client accounts.

30 Year Treasury Unprecidented!

Look at the spike in 30 year treasury! Unprecedented!

Here is a historic look at treasury yields.

It's my opinion that these type of moves in bonds come towards the end of a crisis not towards the beginning.

Source: Carter Worth, Oppenheimer & Co. Dec 5, 2008.

Non-Farm Payrolls

Non-Farm Payrolls came in at a truly horrid loss of 533,000 jobs this past month. Unemployment stands @ 6.7%. Economy has lost over 2 million jobs so far this year.

Separately market is down about 15% since Time ran this cover back in mid-October.

Market selling off near open on this news.

OK So It's Not Just Me!

"Harvard University's endowment suffered investment losses of at least 22% in the first four months of the school's fiscal year, the latest evidence of the financial woes facing higher education.
The Harvard endowment, the biggest of any university, stood at $36.9 billion as of June 30, meaning the loss amounts to about $8 billion. That's more than the entire endowments of all but six colleges, according to the latest official tally.
Harvard said the actual loss could be even higher, once it factors in declines in hard-to-value assets such as real estate and private equity -- investments that have become increasingly popular among colleges. The university is planning for a 30% decline for the fiscal year ending in June 2009."

Two thoughts on this:
1. If this is what they have actually lost so far in 2008 then they still have beat almost every index and asset class by almost 15%.
2. In a bear market investors lose money. But good investors lose less and are prepared to profit with a plan when markets turn up as they usually do.

Here is a link to the story. Harvard Hit by Loss as Crisis Spreads to Colleges By. JOHN HECHINGER and CRAIG KARMIN
http://online.wsj.com/article/SB122832139322576023.html

Stock's Fat Tails

This from Mebane Faber at a blog called World Beta.

I'm going to post this and it should probably be read in conjunction with what we posted yesterday. In a couple of days when I have a bit more time I'll tie the two together in a post regarding equity exposure and ETFs. I've excerpted parts here and I'll link it right below.


The Capitalism Distribution: Fat Tails in Action

"Quick, before you read this post, ask yourself these questions:
1. What percentage of stocks beat their benchmark index over their lifetime?
2. What percentage of stocks have a negative return over their lifetime?
3. What percentage of stocks lose essentially all of their value?


Not sure? The answers to all three questions are below {"The Capitalism Distribution - The Realities of Individual Common Stock Returns" by Eric Crittenden and Cole Wilcox, BlackStar Funds}


When most people think of the stock market they do so in terms of index results. Popular indexes include the S&P 500 and the Russell 3000. However, most people are not aware of the tremendous differences between winning and losing stocks “beneath the hood” of a diversified index. From 1983 to 2006 over 8,000 stocks (due to turnover and delisting) were at some point members of the Russell 3000. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. (Some Russell 3000 statistics here.)

Key findings In order to the questions asked above:

1. 39% of stocks had a negative lifetime total return (2 out of every 5 stocks are money losing investments)
2. 18.5% of stocks lost at least 75% of their value (Nearly 1 out of every 5 stocks is a really bad investment)
3. 64% of stocks underperformed the Russell 3000 during their lifetime(Most stocks can’t keep up with a diversified index)

A small minority of stocks significantly outperformed their peers (Capitalism yields a minority of big winners that all have something in common) In this paper we make the case for the Capitalism Distribution, a non‐normal distribution with very fat tails that suggests a small minority of stocks have been responsible for virtually all the market’s gains while most stocks have been below average investments."

Here again is a link to the post. http://worldbeta.blogspot.com/2007/11/capitalism-distribution.html

Professional Investors Getting It Right?

Interesting Study cited in Pensions & Investments on line version.

Here is it's link. http://www.pionline.com/apps/pbcs.dll/article?AID=/20081126/DAILY/811269993/-1/RSS02&rssfeed=RSS02

I'll have more to say on this at a later date because it drives home one of my points about using ETFs as a substitute for both common stocks and mutual funds.

Hits come half the time for long-only managers
By Thao Hua
Posted: November 26, 2008, 12:09 PM ET
The average active long-only equity manager in all strategies picks the best performing stocks relative to their benchmarks about half the time, according to a report analyzing 215 equity portfolios with a combined $152 billion in assets.
The hit rate, or ability to identify winners and losers, averages 49.6%, according to the report by independent U.K. consultant Inalytics. Even relatively higher performers generally have hit rates of only 51%.
“The typical manager, however, compensates for a mediocre hit rate by generating good gains from the winners,” according to the report. The win/loss ratio — defined as the alpha generated from good decisions compared to the alpha lost from wrong decisions — averages 102%. This translates to an average alpha of two percentage points.
Active equity managers also obtain more alpha in their overweight decisions than their underweight choices. Managers made the correct decisions to overweight a stock relative to its appropriate index about 48.5% of the time. But the win/loss ratio was 113.9%, meaning alpha averaged 13.9 percentage points.
The average hit rate was 50.6% when managers underweight a stock relative to its benchmark, but the win/loss ratio was only 92.2%. This translates into an alpha loss of 7.8 percentage points, according to the report.
“These measures of hit rates and win/loss ratios help establish how a manager generates alpha,” according to the report. “All experience shows that track records are poor guides to the future. … Track records keep the score, but say nothing about how well the game was played or if (managers) are likely to win next time.”
Contact Thao Hua at thua@pionline.com

Guess What? We're In A Recession

With Stocks down close to 50% from their highs, now they tell us?

"The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months."

Here's the full link: http://www.nber.org/cycles/dec2008.html

Market Returns Year To Date

Here are the stock market returns last month {Nov.} and year to date {YTD}.

S&P 500.............Nov=-7.5%..........YTD=-33.44%
Dow Jones..........Nov=-5.3%..........YTD=-38.96%
Nasdaq...............Nov=-9.42%........YTD=-42.10%
Russell 2000.......Nov=-11.42%.......YTD=-38.27%

One small bright note is that the market rallied 19% in the past 5 trading sessions which is its best 5 day rally since 1933.

Ritholtz on Robert Rubin & Citi.

Interesting piece over @ 'The Big Picture" regarding Bob Rubin. Rubin has seen his reputation worsened by his "head in the sand" attitude this year regarding Citigroup.

Rubin: ‘Nobody Was Prepared’ for Crisis of ‘08

By Barry Ritholtz - November 29th, 2008, 11:55AM
“What came together was not only a cyclical undervaluing of risk [but also] a housing bubble, and triple-A ratings were misguided. There was virtually nobody who saw that low-probability event as a possibility.”

With that line, former Treasury Secretary Robert Rubin, and current Citibank board member, shredded what little reputation he had left. Rubin’s attempts at defending his tenure at Citi struck me as totally disingenuous.
While some may uncritically accept that nonsense as fact, we know better. Many people had been warning of housing busts, excess credit creation, and derivatives for quite some time. Quite a few people were discussing this. Warren Buffett had warned about derivatives years prior. Even Merrill Lynch, and their savvy chief economist David Rosenberg, noted in August of 2004 the potential damage the housing and credit boom and bust could cause.
Rubin blamed financial system, not any errors of his own at Citi. And his defense of Greenspan is, in my opinion, the work of a guilty conscious. He and Greenie both supported, and even pushed for:
• Repeal of Glass Steagall
• Exempting of Derivatives from Regulation
• Encouraging Citi to take on more leverage in 2004
• Ultra-low interest rates during, and after the 2001 recession
All of these are factors directly related to the subsequent leverage boom and bust.
Here’s part of the Journal piece:
“Mr. Rubin, senior counselor and a director at Citigroup, acknowledged that he was involved in a board decision to ramp up risk-taking in 2004 and 2005, even though he was warning publicly that investors were taking too much risk. He said if executives had executed the plan properly, the bank’s losses would have been less.
Its troubles have put the former Treasury secretary in the awkward position of having to justify $115 million in pay since 1999, excluding stock options, while explaining Citigroup’s $20 billion in losses over the past year and a government bailout of at least $45 billion…
Since 1999, the bank has lurched from crisis to crisis, first with regulatory authorities, then with investors who grumbled that the bank lacked a strong strategy and was bloated.”
The Journal notes that Mr. Rubin was “deeply involved in a decision in late 2004 and early 2005 to take on more risk to boost flagging profit growth.”
Thus, today Mr. Rubin officially gets moved out of the column of intellectual heavyweights, and into the big “just as full shit as the rest of them” pile.
>
See alsoRubin Agonisteshttp://www.ritholtz.com/blog/2008/11/rubin-agonistes/
Source:Rubin, Under Fire, Defends His Role at CitiKEN BROWN and DAVID ENRICHWSJ, NOVEMBER 29, 2008http://online.wsj.com/article/SB122791795940965645.html
PERMALINK

*Long Citigroup in certain client accounts.

an tSionna 11/30/08: Good & Bad News.

Good & bad news in this picture. The market finally managed to break through these down trending patterns as evidenced by these blue lines. Unfortunately it did so on very light volume so it's hard at this point to say whether we have at least stopped going down for the time being.

If we continue to rally today then there is a much higher probability that the market could rally up to that next resistance line soon.

*Long various ETFs related to the S*P 500 in client accounts.