2008's Coming Back!

FUNDAMENTAL ANALYSIS
It certainly didn't take an economist or analyst to know that the market has taken the economic releases of the week well and brought the market into the biggest positive week of 2008! In fact, the market's almost halfway back up the new year ditch so far and this is also the strongest weekly gain in the S&P in 5 years. It is amazing how good news comes in a series. First is the stimulus package, then the rate cuts (and yes more to come) and today, a major M&A in the tech sector! Microsoft's bid for Yahoo has created huge, renewed, waves of bullishness and excitment throughout the market. M&A's been pretty quiet so far and the fact that its coming back to life suggests that the market may be headed for a turn around. In fact, the disappointing jobs report did nothing to beat the bulls! The Financial and Real Estate sectors, which have been trashed and beaten up so far, are coming back to life as expected. The Dogs of 2007 are indeed going to be the stars of 2008 and that may be happening right now.

TECHNICAL ANALYSIS
On the technical front, the Dow formed a huge morning star formation in an oversold region on the weekly charts, signifying the possibility of a couple of good weeks ahead. Immediate resistance band may be around the 13000 to 1350 region. Certainly a great time for some risk limited call options.


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