Comments to the S&P 500 charts above:

- the volatility is quite down - see ATR (average true range) - this is very strong bullish sign;
- we may see some oversold signals on the SBV (Selling and Buying Volume) oscillator, yet they are still at positive levels and are bullish;
- some bearish signals could be seen on the McClellan Oscillator and MACD;
- advances and declines continue being positive by suggesting dominance of bullish sentiment.

Overall, we may see some signs of the possibility of a correction down, however, at such low volatility level we cannot expect any strong movements down. Even in case of a correction the odds are good of having the market back to its high levels.

Watch out for the strong output of bullish volume today after noon and until 2pm.This strong volume during the price up move could be seen on all main indexes including the S&P 500, DJI, Nasdaq 100 and Russell 2000. After the third session of side-way trading (excluding strong opening on Tuesday January 3, 2001) it could be a sig of possible decline, at least in a short term. The money flow is already moving into the negative area on 5-day charts and money flow started to show weakness on the 1-day charts. If it continues this way we could be waiting for negative trading tomorrow.

In the previous "Index Charts" I have posted yearly charts of the S&P 500, Nasdaq 100 and Russell 2000 indexes. In this post I complete the series of index chart by adding Dow Jones Industrials (^DJI) yearly chart with plotted technical indicators.

Charts 1:  Dow Jones industrials (^DJI) index charts for 2011 year


By following these main indexes you may see that last year trading has been pretty much in side-way volatile trend with the main action in the begging of August 2011 when the indexes substantially dropped down. It is difficult to call this decline as crash as after the indexes had "lazy" 5-month recovery. Even the main indexes (S&P 500, Russell 2000, DJI and Nasdaq 100) did not recovered far from the August's decline we may see some bullish longer-term indication. I would name the drop in the volatility as the main bullish factor at this moment, yet, the volatility is still above the levels we saw in the beginning of 2011. The rest of the technical analysis does not show strong bullish long-term signs.

I have selected longer term technical indicators on theDJI chart above and I would not say that 2012 prospective is very optimistic. Even the volatility down from its high levels, it is still high for long-term bulls to have confident trading. If we take a look at the recovery after 2008 stock market crash we may say that period from March 2009 until May 2010 could be marked as  the first wave of the recovery (long-term uptrend).The period from July 2010 until May 2011 could be market as the second wave of the up-trend. And, we may say that since October 2011 we are in the third wave. It is difficult to say how long the third wave is going to last but we may notice that this wave is not the strong one and it could be the last wave before a recession or long-term down-trend.

Charts 1-3: Russell 2000, Nasdaq 100 and S&P 500 index charts for 2011 year

If you check 10-year S&P 500 chart you will see that the stock market has been highly volatile (big swings up and down) over the past couple of month. We had something similar at the beginning of 2008. If you scroll the chart back you will find similarly tall price bars in 2000. Volatility is an aspect of technical analysis, however, it gives some insides of fundamentals - it tells that at the current moment, the same as in 2008 and 2000 the big institutional investors are very sensitive to political and economic news. Most of the uncertainty and volatility comes from the Europe. Whatever they do in Europe, their debt is not going to disappear magically overnight and most likely we will have such volatile trading for the time being. The financial sector is affected by that mostly. If you check C (City group), BAC (bank of America), JPM (JP Morgan) - who was lending to European countries - you will see that they are in strong decline since May 2011. We already know what could happen if such big institution will ask for another bailout. I’m not doing fundamental analysis, yet, from the technical analysis prospective I think we may see that the stock market is very uncertain which could be associated as period before crash or longer-term recession.

There are several approaches that could be used in the highly volatile market.

1. Some trader may prefer do not hold position (open trade) overnight and over week-ends, especially long week-ends. You never know (unless you have access to the inner circle) what is going happened overnight and how it may affect morning trading.

2. Some traders, especially long- and mid-term traders may consider increasing bar period of the technical indicators they use -
 it will help to avoid choppy trading and will filter big swings we have now.

3. Some traders, especially short-term and intraday traders, may consider decreasing bar period setting of the technical indicators they use -
 it will make indicators more sensitive and they will generate signals faster (more signals could be expected).

Quite a positive week. Even extremely positive. The main push for the stock market was on Monday after the reports on the "Black Friday" sales and on Wednesday after the FED reduced the borrowing rates. However, the rally up was quite volatile and it is difficult to say that the market was strongly oversold prior to this move up. This move up more looks like the orchestrated by somebody pus-up. There are still a lot of unanswered questions and some of them are

• Doesn't European countries have debt trouble?
• Doesn't all financial institutions and countries who borrowed Greece have to take 50% loss in case of bailout?
• Are there other European countries on the edge of crash?
• Why FED lowered borrowing rates? Is it to make it easier for Europe to borrow and put USA into the bigger dependence or is it because of the S&P's downgrade of the rating of the leading USA financial and investments banks? Are they on the edge of collapse and extreme need of cash?
• Why despite the first substantial drop in unemployment the indexes ended the trading session on Friday flat to modestly lower?

I would like to attract your attention to some of the biggest financial banks in the USA:

• City Group stock (C) is 45% down since February of 2011
• Banc of America stock (BAC) is 62% down since January of 2011
• JPMorgan Chase & Co. stock (JPM) is 35% down since February  of 2011
• Goldman Sachs (GS) is 44% down since January 2011
• Wells Fargo (WFC) is only 24% down since February of 2011 (still downgraded by the Standard & Poors)

Do these financial institutions need another bailout? Are they on the edge to collapse? Are we are not told something? Is the FEDs downgrade of borrowing rates is a "masked" bailout?  All of this is not very pessimistic.

I do not believe those stock market analysts who says that the stock market rallied up this week because it was strongly oversold. I'm sorry, but I'm not buying it. The main indexes (S&P 500, Nasdaq 100, DJI and Russell 2000) are only a couple of percents from their 4-year highs and the indexes cannot be oversold at high levels they are now. In order to be oversold, the indexes have to be in the process of selling (the have to drop) with huge volume at the bottom of selling (bottom of drop). If you take a look at 10-year chart of the S&P 500, DJI, Russell 2000 or Nasdaq 100 indexes (you may check it on MarketVolume.com) you will see that they cannot be called oversold. You may only cal the indexes and stock market oversold if you want to dump something at the 4-year highs. In apposite, on these 10-years charts you will see strong increase in volatility. Try to compare such behaviour of the indexes to the periods in 2008 year before the crash and in 2000 before the crash as well. I do not think you will be very optimistic after that despite such "extremely positive week" we just had.

I'm not a professional in fundamental analysis, but, long-term technical analysis of the main indexes (S&P 500, Nasdaq 100, DJI and Russell 2000)  is not promising anything good. In opposite, you may find a lot of long-term technical signals which would suggest the possibility of the recession.

I have not been writing for the past three weeks. yet, there were no much action beside volatile side-way trading.

In my previous post (See the "Technical Analysis" post on October 30, 2011) I dragged your attention to the strong volume surge seen on October 26-27, 2011. I wrote: "There are high odds that such strong volume (strong action) may cause changes in the supply/demand balance. Now, the simple question is whether there are left enough bullish traders to support further up-move. If not, then we may see down-turn."

It looks like the stock market indeed made a change in supply/demand balance - as after strongly positive October we had mostly volatile side-way trading in November. However, now, the odds are changing again. The negative trading we saw past week has pushed many technical indicators, including money flow on longer-term charts from neutral readings into into the bearish condition. In addition major indexes (S&P 500, DJI and Russell 2000) are moving close to their lows seen on November 1, 2011. The Nasdaq 100 already had broke its lows and could be considered in the confirmed down-trend. The only relatively bullish thing, I could see at the current moment, is drop in the volatility. Yet, a strong drop in volatility is some cases is associated as a climax before strong price move (also referred to as the "silence before a storm").

We still have to keep our eyes on the Europe. Despite the Greece bailout promises there is still trouble in Italy, Spain, Ireland. In addition the "Bailout Money" have to come from somewhere... Another political point that may negatively affect the stock market trend is the "impotence" of the Congress.

Overall, I would say that the stock market longer-term sentiment could be considered bearish and so far I do not see strong technical indicators against it.

Despite the positive trading in October the technical analysis does have some bearish indications. We may see that October's advance was greatly supported by the decline in the US Dollar (See the S&P 500 and US Dollar indexes chart below).

We still may see positive money flow on the hourly charts and other positive indicators such as MACD, Stochastics, RSI, and etc (see the chart below). However, at the same time we may see small increase in volatility, especially over the past week. The fact that we do not see decline in volatility is a bad sign for the longer term-bulls and may suggest that current up-swing could be easily reversed down. Yes, the volatility is lower than it was during the decline/crash in the beginning of August 2011, yet, it is still  quite above the bullish volatility levels seen prior to the August 2011.

The other alerting sign is the strong bullish volume generated on October 27, 2011 - during the strong up-move (reaction on the decision to bail out Greece). It is difficult to assume that this volume was the result of the actions of the long-term bullish traders. On my opinion they would rather wait for the indexes (S&P 500, DJI, Russell 200 and Nasdaq 100) to break their highs. This bullish volume surge is more suitable for mid-and short-term traders. Keep in mind that volume is two side transaction and big volume surge during the price advance means that on October 3-26, 2011 the price was moving up because there were more buying orders of bullish traders and bearish traders were not rushing into the game. However, on October 26-27, 2011 big number of bearish traders came into the stock market and started to sell by satisfying orders of bullish traders buying in greed. There are high odds that such strong volume (strong action) may cause changes in the supply/demand balance. Now, the simple question is whether there are left enough bullish traders to support further up-move. If not, then we may see down-turn.

Chart: S&P 500 chart with elements of technical analysis

 

October was quite a nice month for the US stock market. Most of the indexes (S&P 500, DJI, Russell 2000, Nasdaq 100, and etc) has recovered more than half of their August-September losses. The Nasdaq 100 index actually is very close to its high seen on July 25, 2011.

From one side such positive month could encourage many traders and generate hope that the US stock market is in the new longer-term up-move. We had a number of relatively positive news and economic reports on the US market. Decision to bailout Greece in Europe has added another positive momentum to the market sentiment. However, from other side there are many small disturbing signals and factors that would usually alerted many traders.

1. Unemployment continue to stay on the the same high level. The companies prefer to invest into upgrading of the technology which does not cover increasing working places and in opposite assumes using automated technologies instead of people.

2. Coming deadline and respectfully battle for cut losses in the Government. So far we have not seen any good coming from that.

3. Nobody hiding that coming cut losses will add greatly to unemployment as many Government projects will be closed.

4. Despite the fact that companies have reported good profits, many companies are lowering their expectation for future profits as demand on the product is dropping. The market is oversupplied.

5.  Even the bailout of Greece sounds like a good news the fact that banks will have to accept 50% loss in Greece debt may put some banks on the edge of bankruptcy. In addition, so far, it is not clear where the bailout money will come from.

It looks like my bearish mood, expressed in my previous post "Increasing Volatility"  on September 27, 2011 is paid off by nice decline. I repeatedly mentioned that the crash we saw at the end of July - beginning August of 2012 could be the first wave of the recession and now, when the Russell 2000 and S&P 500 broke their lows set on August 9, 2011 we could say that there is a high probability that we are in the recession - of course not "officially" because Government and news would not like to generate any worries...

Just take a look at the numbers - since beginning of May 2011:
 - the S&P 500 index lost almost 20%;
 - the DJI index lost 17%;
 - the Russell 2000 lost almost 30%
 - the S&P Financial index lost almost 35%

Maybe the numbers above could not be called "the Recession", but, it could be too late if we start to call a recession after the stock market indexes losse more than 50%. An the negative point is that there are nothing positive to possibly push the market back 20% up. In opposite, coming cuts in spending without equivalent increase in revenue may hit the economy, at least in a short-term, down

By going back to the technical analysis, there are a few sings that make me consider the possibility of further decline.

1. First of all, we again see an increase in volatility which is quite a bearish sign.

2. Second thing is that that even some market indexes are traded below and some only lightly above their lows seen on August 9, 2012, the current decline did not generated extremely panic selling. The today's increase in bearish volume was smaller than the bearish volume we saw on September 22nd of 2012 and the today's bearish volume cannot be compared even closely to the bearish volume seen in the beginning of August 2012. This tells me that the institutional bullish longer-term traders (also known as "big money") are not rushing to buy at the current "lows" by expecting even lover prices. Respectfully, the market outlook is that the selling pressure most likely will continue to be dominant.

Of course when you are in short and you are in winning position it would be stupid do not set a stop loss to protect the profit, still, at this moment I would expect to see further development of down move. If this is the second wave of the recession (stock market crash) then I would expect to see the bearish volume at the end of this wave which would be stronger than the bearish volume seen in the beginning of August 2011.

We continue to see volatile swings up and down. This is not a good sign for the stock market and suggests quite shaky mood among traders. Worries in Europe mixed with worries in the USA economy are not a good background for the growth on the stock market. It is understandable that cuts in spending means that some Government's contracts will be squised and some will be shut down, it means more people will be unemployed and all the rest will go from there.

It is difficult to be an optimistic trader at this moment. From the technical analysis prospective, longer-term outlook is not very nice as well. Many technical indicators are showing negative longer-term sentiment. The main indexes (S&P 500, DJI, Nasdaq 100 and Russell 2000) have been in the side-way volatile action since the beginning of August 2011. In a healthy market the indexes are usually traded very short time at support level and spend more time at the resistance. Now, on the longer-term charts you may see two months of volatile trading at the support level and this is not a good sign.

When we go deeper into intraday charts we may see some positive (bullish) signals on some technical indicators at some moments. However, it is difficult to consider them as a strong signals and it is difficult to trade them. Strong swings at the market open do not let majority of short-term trader to open or close a trade at better points and I believe that there are many traders who prefer to remain in cash until the stock market is traded in the side-way. Still, for those short-term trader who still is in the game I would say that taking into account negative longer-term sentiment it is could be quite risky to trade short-term bullish signals.

It was a nice positive week that broke four-week pattern of negative trading at the end of the week (Thursday-Friday) when short-term traders did not have a desire to hold "long" position over week-end (See "Friday's Syndrome" post).

Past five positive trading session has pushed many technical indicators, including the ones on the longer-term charts, into positive territory. Volatility on the indexes dropped to the end of July level which could be considered as a good sign for longer term bulls. The Nasdaq 100 index has strongest positive momentum while DJI, S&P 500 and Russell 2000 indexes are still below their resistance line set on August 31, 2011.

Characteristical moment of the past week was steady increase in trading volume which could be explained as longer-term bulls started to buy at low. On the other hand, the strongest increase in daily volume was noted in the Nasdaq 100 sector and it is difficult to say that it was the "buying at low" action as the Nasdaq 100 index is much closer to the highs seen in July than to the lows seen in the August of 2011. Therefore, I would be here careful with statement that longer-term bulls were buying last week.

As I mentioned above the decreasing volatility is a good sign for the longer term Bulls. However, volatility is still at high levels to consider it is bullish. Still, at this moment, from the technical analysis prospective there are no negative signs for the coming week with an exception of the fact that over the past five trading days the indexes advanced up strongly on increasing volume. During that time the market accumulated solid bullish volume and indexes could be considered overbought over the short term.

As I was mentioning during the past two weeks: the last four week we have "Friday's Syndrome" when the beginning of the week is positive and the Thursday-Friday are negative with strong decline on Friday, as bullish short-term traders (who stays in position no longer than 2-5 days) do not want to hold position over week-end by selling and going into cash. The past week was not an exception. We had relatively strong decline on Friday again, which followed the strong decline on European stock market, resulted by negative announcements in European Central Bank.

When somebody is telling that the Friday's decline was a result of the President's speech he or she is simply playing politics. There were no surprises for investors, everybody knows that congress will do whatever it takes to destroy the President agenda and there is nothing new in that.

Since May 2011 European indexes are in decline which is a clear sign of recession or even stock market crash in Europe. We live in the era when all markets are connected and whatever is going on one market affects the other markets and European recession affects US stock market as well.

The US stock market has been in the volatile side-way trading since the beginning of August 2011. The strong bearish volume surges at the  resistance level  in period from the August 3 until August 15, 2011 marked the bottom of the crash we had in July-August (could be the first way of the recession). However, the indexes (S&P 500, DJI, Russell 2000 and Nasdaq 100) did not recovered after that - all we had is the volatile side-way action over the past month - this is negative longer-term sign.

There are other longer-term negative signals from the technical analysis prospective, that suggest the possibility of the second wave down. This is high volatility level - it is not as high as it was at the beginning of August 2001, but it is still quite high to consider the possibility of further developing of the recession. Another sign is high number of extremely low advance/decline readings in short period of time which suggest very nervous trading when investors are just watching when to start selling and they sell no matter what stock they have and no matter how the underlying public company (stocks of which they own) is doing.

As you may see my longer-term outlook is not very optimistic. Therefore by following my posts in the beginning of August (see "Time to buy" and "Stock Market Crash") I will be selling (setting stop order) the stocks I was buying on August 5-8, 2011 while these stocks are still in 15-20% profit.

Again, forth time in a row we saw negative Thursday (see my previous "Friday's Syndrome" posts). Will the Friday be as well negative as we saw it over the past three weeks when short term investors preferred to pull money out from the stock market and stay in cash over the week-ends, or the President speech will break "Friday's Syndrome" and push the indexes (Nasdaq 100, S&P 500, DJI and Russell 2000) and the stock market into positive mood?

So far, the short-term technical analysis is not in the favor of Bulls for tomorrows trading session. The only relatively positive thing could be considered is decline in volatility (yet, it is still at high level) and that we do not see any strong volume surges over the past three weeks which means that longer-term traders are are not trying to sell in panic, yet, they are not rushing to enter the long position either.

Quite a nice rally we had today as a continuation of the rally that started yesterday shortly after the market open. The S&P 500 index has rallied almost 4% since that time. The Russell 2000 index gained almost 7% since its low seen yesterday at the market open and the DJI index moved up almost 4.5% since that time.

From one side it is nice to see the recovery, yet, keep in mid that over the past three weeks last days (every Thursday-Friday) were associated with strong declines. Right now the technical analysis is bullish (result of the cutrrent up-move) and most of the technical indicators suggest the possibility of further advance. My technical indicators suggest higher odds of having a positive trading session tomorrow as well. However, we have to bear in mind that the stock market remains to be highly volatile. I would be happier to see smaller up-moves but on the lower volatility which would indicate that these smaller up-move could last longer in time. Yet, at such high volatility level we should be ready to see changes in the market trend in either direction.

The major indexes (S&P 500, DJI, Nasdaq 100 and Russell 2000) have bounced up today after the strongly negative opening (more than 2% in red at the today's market open). TheNasdaq 100 index has recovered from most of the morning losses while other indexes have recovered at least half of their morning losses.

It looks like it become a custom to have a decline at the end of the week - decline on September 1-2 and decline on August 25-26 and decline on August 18-19. Over the last three weeks Thursdays and Fridays were associated with strongly negative trading while the rest of the week-days could be considered positive. The possible explanation could be that short-term bullish traders (who stays in a trade no longer than for 2-5 days) prefered to close their long position in fear of the possible negative news and possible negative events during the week-end while short-term bearish traders did not mind staying longer in their short position. Why am I referring to the short-term traders? - because the Thursday-Friday's declines were not associated with high volume - respectfully mid-term and long-term traders did not participated in these movements.

Such sentiment would confirm the nervous condition of investors which should not be a surprise, especially when investors are looking at the European stock market scenario by expecting the possible development in US stock market. In Europe the DAX index is 30% down since the beginning of May 2011 - I would say quite a strong crash in just three months. The rest of the European indexes suffered 15-30% decline as well. And all of that was the result of Government crisis, high debt and high unemployment in some of the European countries. Don't European problems sound familiar?

Overall we would have the past week as positive if not the Friday's strong decline. Right now the major US indexes (S&P 500, Nasdaq 100, Russell 2000 and DJI are where they were a week ago (on Friday, August 26, 2011 after the market closed).

If the longer-term charts are still positive, the Friday's drop down has pushed many technical indicators on the hurly charts into the bearish sentiment. On my opinion, at the current moment, the worst indication for bulls is the volatility. The Friday's decline was quite strong and it has add to the volatility. The market/indexes started to show weak signs already on Wednesday and Tuesday and decline on Friday was not a surprise. Yet, I would say this drop was too strong to be considered as a normal correction of the recovery started on August 23, 2011. If in the longer-term we still may see some good odds to see indexes 6-10% up the fact that we do not have decline in volatility suggests that the big investors are still quite nervous and they are still reacting quite strongly on even slightly negative news. All of this could could make  the decline (crash) we had in July-August of 2011 as the first sign (first wave) of the longer-term recession..

Even the public companies are doing good and they report good profits, the fact of high unemployment and low consumer confidence and that nothing going to change in this field make the future projections for the public companies not very optimistic. It is quite simple - the more people stay out of job the less they spend - the less people spend the less profitable corporation are. Question with unemployment stays quite strong for the following reasons:
1. Corporation are not going to increase the number of employees - it is less expensive to buy robots and computers than pay to an American worker.  It is better for them to give job to the people in India and China than to work with an American. So, no help will come from there.
2. American troops are going to come home and it will add to un-working class.
3. Cuts in the budget means more government workers will be on the street.

So, consumer confidence and unemployment are not going to become better. No matter what the President or whoever else wants, nothing is going to happen - simply because the Congress will not let it. The Congress has interest in destroying the President and the Country and they do not care about "suffering America". They need it to win the next elections. The investors see it: conflict in May 2011 over budget that almost put Government out of business, conflict over the debt calling in July 2011 has almost put the country into default. Nobody expect nothing good from the Government any more... Respectfully, investors expect to have unchanged or even bigger unemployment, they expect the same or even worthier consumer confidence. All of this make expectation of future good profits (good reports) from the public companies (stocks) quite slim. As a result the investors slowly pulling money out of the stock market.

As you see longer-term economical background for recession could be quite strong. So far, from the technical analysis, only volatility suggest the scenario of the possibility of the longer-term recession.

My proposal on how to help with unemployment:

1. If more than 20% of corporation's expenses are over-sea's expenses (whatever the expenses are: supplies, customer support, development, etc) than this corporation has to pay additional 15% tax from the profit.

This will make the corporation to think where to expend their business (over-sea or in USA) and will make small and medium businesses stronger and more competitive to the big corporations. We have to make sure that 'Made in USA' can compete with 'made in China' and 'Made in India'. We have to make sure that customer support to American customers is provided by Americans. We have to change the dogma that Americans are consumers and the rest of the world sells to Americans. We can work and we want to work.

2. The exemption from the p.1 are the companies that has more than 50% of profit coming from export (companies that deal with natural resources, oil, mining and other companies should not be covered by this exemption).

We need to balance import/export and we need to protect those who exports and those who sell "Made in USA" outside of USA.

3. If a company shows the grow in the number of employees (not over-sea's employees) that worked for more than 1 year in this company then this company is entitled for the equivalent tax deduction (max 5%). The companies that deal with natural resources, oil, mining and other companies should not be covered by this tax exemption.

It should definitely attract the companies, small and big to open new working places and make it easier for them to invest the money they have into the company's expansions.

4. Addition to the p.3: If a company sponsors two full time students in USA (not over-sea) for a year (tuition fees and leaving expenses) then it should be equivalent to one new working place for the tax deduction in the p.3.

If we want to compete with the rest of the world we have to think about education. People with good education and good qualification have more potential to start a new business.

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I could add more points, but I think it is enough for you to start thinking instead of listening manipulative speeches of the politicians. If the politicians cannot find the way they have to hear our voice.

Do you think if we would have similar policies it would increase the revenue, it would help with trade balance and it would reduce the unemployment? If your answer is yes, and you like it then

IMPROVE IT (add your thoughts), SHARE IT
and Pass it to those who you voted for and those who you are going to vote for.

What a nice day. The main indexes (S&P 500, nasdaq100, DJI and Russell 2000) have broke their high seen at the market open on August 17, 2011. Most of the technical analysis, from daily charts to intraday time-frames are showing bullish sentiment and there are quite good odds to see another positive week.

The only negative sign that should be taken into account is volatility which is still at high levels. It is much lower than it was in the beginning of August, however it is still at high levels. If the volatility remains at such high levels, even if the market recovers, over the longer-term, I would be quite skeptical - there is the possibility that the market crash we had in July-August could be the first sign of the longer-term recession.

Coming back to my posts which were published during the crash ("Time to Buy" on August 7, 2011 and "Stock Market Crash" on August 8, 2011) I may say that the stocks I bought at that time are about 20% in profit at this point of time. It was my second try to go from ETFs to stocks. First time it was in January 2009 when I was buying C (City Group stock) and when I made more than 100% over a month and now it was the second time and it played good again. I think it is a good strategy during the crash to spend some time and find oversold and under-evaluated stocks - it looks like they could deliver bigger profit over shorter period of time.

The past week has brought us another bounce down. Now the major indexes (S&P 500, DJI, NYSE composite and Nasdaq 100) are at their lows seen on August 9-10, 2011. Even the volatility is much lower then it was two weeks ago, the technical indicators by the end of this week are bearish and do not suggest anything good for Monday.

The strong drop we had on Thursday August 18, 2011 suggest the the stock market is still quite nervous. When everybody are talking about recession and all over the news you may hear that the recession is coming and the best place to keep investments is to have it in the Gold what do you expect the major public is going to do? Where do you think the people will ask to move their pensions plans? Second point that could feed a recession is the crisis in the Arabian world which could lead to the crisis in oil. And the last point for the recession is the crisis in the Goverment. At the current moment the Government is not protecting economy, it is not protecting people. All it is doing is earning points for the next elections and protecting the big corporation (that is why they will sponsor the election complain). The Government's cuts will lead to more people without work - the unemployment potentially could be higher, luck of consumer confidence respectfully will be higher, people will be spending less, and etc.