- Technical Commentary -

November 4, 2009 (FinancialWire) (By Dr. Joe Duarte) — The S&P 500 and the S&P 500 SPDR ETF (NYSE: SPY) are dancing between the 20 and 50 day moving averages. Intraday volatility is rising. And we are in the midst of a very important week. That means that anything is possible. Yet, as more time passes, the odds of a major market crash are diminishing as downside momentum is starting to dissipate.

The fireworks may start as early as Wednesday morning when the Challenger Job Cuts report and the ADP Employment report are released before the market opens. The Fed will make its latest interest rate announcement in the afternoon. And in between, we’ll get all kinds of other goodies that could move the market, including the U.S. Energy Information Agency oil supply report.

Thursday we get Jobless claims and the Monster Employment Index, both a prelude to the big number of the week, the employment report on Friday morning. Throw in a few earnings reports, two important gubernatorial elections, and perhaps a merger or two, as we’ve seen lately, and you’ve got the potential for all kinds of mischief, misdirection and volatility.

The real question for investors is whether we’ve gone anywhere lately. And the answer is maybe, at best. The S&P 500 has fallen below its 50-day moving average but has not really broken below the 1040 level convincingly enough to bring out the big bears. What we’ve seen are minor forays and probes by traders trying to see if the market will break. So far it hasn’t broken. And that means that as time passes, the news ahead will likely influence the way things turn out.

We’ve had a 5% correction in the S&P 500 over the last two weeks. We’ve seen profit taking in the big Nasdaq technology stocks. And yet, we have not seen a real honest to goodness market breakdown.

The longer the market holds up, the least likely we’ll see a crash, barring news or an external event. In other words, the bears are running out of time. If they don’t overwhelm the bulls within the next few days, the up trend is likely to reassert itself. Still, it’s foolish to make any huge bets before Friday’s employment report.

[Go to http://www.financialwire.net/?s=joe+duarte to see more commentaries by Dr. Joe Duarte.]

FirstAlert(tm) “Money Index” is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ/AMEX 25 Most Actives and NYSE/NASDAQ/AMEX greatest Percentage Losers and Percentage Winners (weighted against pure monetary loss/gain) indicate the direction in which the mass of money is flowing, as well as the general focus of the market. Of the Most Actives, last session’s trading showed 14 advancers versus 11 decliners. Volume leaders were led by Citigroup Inc. (NYSE: C) trading 77,460,500 shares closing at $4.04 (up 1.3%), the SPDR Trust ETF (NYSE: SPY) trading 38,915,600 shares closing at $104.65 (up 0.3%) and the PowerShares QQQ Trust Series 1 (NASDAQ: QQQQ) trading 38,204,995 shares closing at $41.26 (up 0.3%). Of last session’s Greatest Percentage Losers, stocks taking the greatest monetary losses were led by Cedar Fair LP (NYSE: FUN) trading on volume of 442,800 shares (losing $136.0 million), Technitrol Inc. (NYSE: TNL) trading on volume of 359,800 shares (losing $53.1 million) and Entercom Communications Corp. (NYSE: ETM) trading on volume of 236,700 shares (losing $47.1 million). Of last session’s Greatest Percentage Winners, stocks making the greatest monetary gains were led by Diedrich Coffee Inc. (NASDAQ: DDRX) trading on volume of 906,054 shares (gaining $29.0 million), United Security Bancshares (NASDAQ: UBFO) trading on volume of 66,190 shares (gaining $16.4 million) and Navarre Corp. (NASDAQ: NAVR) trading on volume of 66,225 shares (gaining $15.3 million). The complete chart for today’s FirstAlert(tm) Money Index Synopsis is posted at investrend.com (http://www.investrend.com/fa-index). Go to http://www.financialwire.net/?s=%22%27Money+Index%27+Synopsis for all the most recent FirstAlert(tm) “Money Index” Synopses.

The FirstAlert(tm) Economics Calendar lists ADP Employment Report for October (8:15 a.m.), Treasury announces Refunding auctions (9 a.m.), ISM Non-Manufacturing Index for October (10 a.m.), EIA Petroleum Inventories (10:30 a.m.), FOMC Meeting - policy announcement (2:15 p.m.).

The FirstAlert(tm) Events Calendar showcases AFFY at American Society of Nephrology Annual Meeting; AMTD, TWPG, NITE, BPSG at Keefe, Bruyette & Woods Securities Brokerage & Market Structure Conference; CPST, FCEL at World Energy Engineering Congress; DHR, GE, ITT, CAT at Goldman Sachs Global Industrials Conference; MGLN, WLP, VRTX, HALO at Oppenheimer & Co. Healthcare Conference; PCYG at Financial Services Exchange Connect for Success Conference.

FirstAlert(tm) Website of the Day: http://www.touregypt.net/featurestories/carter.htm

Quote of the Day: “Though my plans at the moment are vague, I can assure you that I’ll never run for the Senate in New York.” Laura Welch Bush

Today is: Victory Day in Italy, Flag Day in Panama.

Happy Birthday: Mary of Orange, Will Rogers, Gig Young, Walter Cronkite, Art Carney, Martin Balsam, Doris Roberts, Loretta Swit, Delbert McClinton, Laura Welch Bush, Markie Post, Jeff Probst, Sean “Diddy” Combs, Matthew McConaughey.

Today in History: The future Mary II of England married William, Prince of Orange, in 1677. They would later be known as William and Mary. The Erie Canal was completed with Governor DeWitt Clinton performing the Wedding of The Waters ceremony in New York Harbour in 1825. In Egypt, British archaeologist Howard Carter and his men found the entrance to King Tutankhamun’s tomb in the Valley of the Kings in 1922. The Netherlands experienced the first Car Free Sunday caused by the 1973 oil crisis.

[FirstAlert(tm) was created by Gayle Essary, founder of Investrend Communications, Inc., parent of Investrend Information. The opinions expressed in FirstAlert(tm) do not necessarily reflect the opinions of Investrend.]

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