Market SLAMMED On Day 1!

The market was SLAMMED face down today on this first trading day of the year when the ISM index turned in far worse than expected. ISM index turned in at 47.7%, far lower than the expected 51% and at its worst level since April 2003! An ISM reading of lower than 50 indicates a contracting manufacturing sector and a contracting manufacturing sector is never a good sign for the economy. On the bright side, the last time the ISM index was this bad back in April 2003, a series of action taken by th regulators spurred the market right back up and into a bull market ever since! Yes, the Feds need some really terrible numbers to convince them that more needs to be done and it sure does seem that way this time round as the Fed Fund Futures immediately priced in a 100% chance of a rate cut this coming meeting. Will the prospects of more rate cuts bring the market back? It is anybody's guess right now. Market action recently has totally baffled analysts and economist like myself who really cannot put a finger down to a definite, cohesive conclusion. There is one concensus though, and that is the market is expected to be volatile this year, maybe even more volatile than last year. Its definitely going to be a bumpy ride ahead.

On the technical front, the Dow broke the bullish reversal pattern to downside. More and more it seems like the market is going to laspe into a sustained lobotomy like we saw back in 2004.