New Deal Fails To Excite...

The new rescue plan passed by the Senate worth a total of over 800 billion (in cash and tax breaks) was greeted with cold shoulders by investors today as skepticism remains on the eventual outcome by the Congress.

Investors were also bombarded today by a string of poor economic data which suggested that aggregate demand was hit by the recent gain in the US dollar and that we should see recession in the numbers going forward. All the numbers this week has shouted "recession" on the top of their voices (we all know that the US economy was in a recession for months, right? It just did not show up that clearly in the numbers then.), casting a dark shadow over the outcome of tomorrow's Jobs report (see economic calendar). I suspect that we should see unemployment go up further in tomorrow's data, probably matching or beating the high of 2003. That way, we would have the capitulation needed to continue watching for a turnaround.

On the technical front, the short term and primary bear trend of the Dow remains solidly intact with volume rising steadily into the trend. Surprisingly, the Dow isn't in a deep oversold condition yet, so the possibility of a reversal continues to be pretty low. Short term support level will be around the 10000 level.