Depression Watch (Fri. Jan. 23 2009)

{Dow Close}
(Fri Jan.23)          =  8,077.56   45.24 (-)
(Fri Jan.16) =           8,281.22    68.73 (+)
(Fri Jan.9)     =        8,599.18    143.28 (-)
(Fri Jan.2)   =        9,034.69    258.30 (+)     
(Fri Dec.26) =            8,515.55    47.07 (+)
{FFC - Friday to Friday Change}
(Fri Jan.23) =                            203.66 (-)
(Fri Jan.16) =                            317.96 (-)
(Fri Jan.9) =                               435.51 (-)
(Fri Jan.2) =                            519.14 (+)
(Fri Dec.26) =                            63.56 (-)
(4 wks) =                                297.89 (-)
(5 wks) =                                501.55 (-)
{VIX}
(Fri)     =                      47.27       
(wk-avg Jan.23) =                  49.408         2.336 (+)
(wk-avg Jan.16) =                  47.072         6.468 (+)
(wk-avg Jan.9)   =                  40.604         0.374 (-)
(wk-avg Jan.2)   =                  40.978         3.620 (-)
(wk-avg Dec.26)   =                44.597         8.017 (-)
{Oil}
(Fri Jan.23) =                 $46.47
(Fri Jan.16) =                 $36.51
(Fri Jan.9) =                      $40.83
(Fri Jan.2) =                    $46.34      

{Last Week}

Weekly trends (the FFC, Friday to Friday Change), leading to the monthly trend {4 or 5 week average}, is as close as we can currently get in predicting trends. From the above, we can gather a current trading range of 8,000 {bottom} to 9,000 {top}. This is the {limit} of our understand, with the above information. These are also called the {bounds} ; so if the weekly market trend moves up, beyond 9,000 bound, it's a possible signal that current bound is a market bottom ; conversely if it trades below the lower bound {8,000} the market will shrink further (a deepening recession or a depression). Knowing our bounds, we can now look for transition points between bounds.

The current 4wk month trend is (-) the number value show the momentum (or steepness) of the trend. However, as week look at the FFC we can see a momentum range with 64 as the lower bound and 519 as the upper bound, and a mean (average) of 204. This means that momentum of 298 is not out of bounds, but above the average. Then with the market being near the 8000 lower bound, this momentum could push the market out of bounds, and be a transition point. (In this case, signalling a growing recession.)

{This Week}

This week was two things; 1. Obama's Inauguration and 2. the addition of the FFC 5th week. The hype was that Obama was going to hit the ground running (which he did) and this would (hopefully) bring confidence back to the market. The result - an increase in the market's downward momentum. However, the silver lining (if one can call it that) is that the lower bound of 8000 has not be broken. This is economics strictly by the numbers, not by existing theory.

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