Stock Market Update 04 Jan 2009

A quick update.

The SPX broke above 918 on Friday, Jan 02.

This is VERY BULLISH short term but we need to see follow through on Monday, Jan 04 as it occured during the holiday period when there are very few traders at their desks.

What I am seeing is price rise on low volume; that is indicative of computer long "buy" programs being initiated combined with computer short "sell" cover programs also kicking in. This is nothing new and occurs on occasion when the "management" are on holiday and they leave the skeleton staff in the brokerage houses to oversee the limited trading.

The key is to watch Mondays action. A sustained price rise on huge up-volume is very bullish; a go-no where or declining day is bearish.

Bottom Line:

Staying put for another day. We are very close to either a buy or a "sit on hands". The next day will tell.

Positions remain unchanged.