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Monday, April 13, 2009

The Empire Strikes Back

The big news today came after the close, with GS pre-announcing earnings, which, of course, were absolutely off the charts, just in time, coincidentally of course, for their secondary offering. I suppose it's better for the investors to be the bagholders than the taxpayers. We gapped down today but reversed early, and in the afternoon broke through the 857 pivot point, but last minute selling brought us back, and we are now sitting one point above it. The next target is the 875-877 area, which should be subastantial resistance. Volume dropped today, wasn't bad. I would expect a gap up tomorrow, especially in the financials, but I wouldn't be surprised to see a sell off afterwards.

The Nasdaq lagged today, on substantially lower relative volume. Weakness here is a decent indication that a pullback is coming.

Strangely enough, the NYSE composite has underperformed the Nasdaq recently both on the way up and on the way down. The price relative line looks to be leveling out, meaning a reversal could be imminent, but what will it mean for the overall market?

"Too big to fail" isn't helping the Dow industrials. the weakness continues as a bankruptcy for GM appears to be a foregone conclusion.

A day of relative weakness in the Russell 2000, but the trend is relative strength. MACD is higher than it has been in a long time, but not overbought. The 200dma is actually in sight, but there is going to be a lot of resistance on the way up.

My post over the weekend about Goldman Sachs turned about to be quite timely (accidentally). Mish kicked things off with a "break up Goldman Sachs" post. In the process, I discovered a couple of good blogs that I had never seen before, and they are both being added to the blogroll: Zero Hedge and

I will have the new highs update shortly.

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