Come meet us at the 2010 NYC Traders Expo next month! This is a great opportunity to get a tutorial on our seasonal trading tactics, ask us anything you wish and get a full rundown of the new, redesigned Almanac Investor. I will be speaking at the upcoming Traders Expo in New York, February 14-17, 2010, and have been given the opportunity to invite Almanac Investor Newsletter subscribers to receive a complimentary pass to attend the full conference as my guest!

On Monday, February 15 from 6-7 pm I will present: Seasonal Sector Trading Tactics—Using Technical Timing Tools to Maximize Profits in Historical Seasonal Patterns.

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About The Show
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State of the Market

President Obama gave one of his great speeches last night. He is quite an orator as we’ve come to know. It started out a bit stiff. The audience, including cheerleader number one VP Joe Biden, was silent for several minutes, but once he got rolling the applause and guffaws began to flow. There were moans from the opposition and moments where all sides cheered. Everyone agreed that “we all hated the bank bailout” and the President may have gotten his biggest laugh when he said the bank bailout was “as popular as a root canal.”

Obama had something for everyone – from new nuclear power plants and offshore drilling, to alternative energy incentives and initiatives, to tax cuts, jobs programs, education, exports, innovation, financial reform and even health insurance reform and international affairs. (Notice the semantic change to “insurance” from “care”). And so on. He pretty much covered everything.

However, though the tone and delivery were impeccable, much of the rhetoric sounded familiar and it’s hard to believe much in Washington will change anytime soon. But we sincerely wish the President and all of us the best of luck. Obama artfully stepped above the fray, scolding congress with “Saying no is not leadership,” chiding the Supreme Court for overturning campaign finance reform and reprimanding lobbyists and special interests for meddling too much in the affairs of state.

Despite, couching financial reform as securing the system to promote economic growth versus punishment for bad behavior, the market acted thoroughly unimpressed today. Major averages were down about 2% or so at the midday lows before recovering about half the day’s losses. But as the final half hour comes to a close the afternoon rally has faded.

This has put our vaunted January Barometer more deeply in the red. In order for the JB to turn positive the S&P 500 will need to rally about 31 points tomorrow (Friday, January 29), or about 2.8%. Over the past several days and weeks we have warned about the ominous portent of a Down January, especially in conjunction with the Dow’s already triggered December Low Indicator.

Perhaps a confirmation of Ben Bernanke to another term at the helm of the Fed will inspire traders, but the damage may already be done. Wall Street and Main Street seem rather perturbed with Pennsylvania Avenue. Politicians and citizens are frustrated by bankers. The financial and investment community is not excited by what it is hearing from Washington or the rest of the nation.

Something positive could come out of tomorrow’s earnings releases, but there does not appear to be much the can offset today’s announcements. Friday’s economic release docket is packed with some potential market moving numbers: ECI, GDP, ISM-Chicago, U of Michigan Sentiment and Ag Prices. So a big rally tomorrow is not out of the question. Our Market Probability shows a 67% to 76% chance of the day being up on the major averages, but the average gain is about 0.5% – and the largest S&P gain on the last day of January since 1950 is 2.5%, which will not cut the mustard.

We will have another Alert tomorrow after the close with the official January Barometer reading for 2010, but for now sit tight and start thinking defensively as this market is showing a loss of momentum technically, some fundamental weakness and negative seasonal indications.