Depression Watch (Fri. Jan. 30 2009)

{Dow Close}
(Fri Jan.30) =            8,000.86  ;  148.15 (-) ; the week range [8000, 8375] ; the difference = 375
(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 (+)     

{FFC - Friday to Friday Change}
(Fri Jan.30) =                            76.7 (-)
(Fri Jan.23) =                            203.66 (-)
(Fri Jan.16) =                            317.96 (-)
(Fri Jan.9) =                               435.51 (-)
(Fri Jan.2) =                            519.14 (+)

(4 wks) =                                323.69 (-)
(5 wks) =                                400.39 (-)

Range (4 wks) = [204, 519] ; Difference = 315
Range (5 wks) = [77, 519] ; Difference = 442

{VIX}
(Fri)     =                                 44.84    ;  the week's range [40, 46] ; the difference = 6   
(wk-avg Jan.30)   =                43.014    ;     6.394 (-)
(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 (-)
Range (4 wks) = [41, 49] ; Difference = 8
Range (5 wks) = [41, 49] ; Difference = 8

{Oil}
(Fri Jan.30) =                  $41.68 ;  the week's range [42, 46] ; the difference = 4
(Fri Jan.23) =                 $46.47
(Fri Jan.16) =                 $36.51
(Fri Jan.9) =                      $40.83
(Fri Jan.2) =                    $46.34    
Range (4 wks) = [36, 46] ; Difference = 10
Range (5 wks) = [36, 46] ; Difference = 10

{Dollar Index}

(Fri Jan.30) =                86.00

{Last Week}

This week was two things; 1. Obama's Inaguration 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.

{This Week}

A week into the Obama Administration, and we are at the lower bound of 8000. As well, we have had 4 weeks of week to week market declines. The question here is the market in the process of setting a new trading range. This would mean that the market is not a settled (flat) market (as suggested by economics reports on a market bottom) but transitional market, with a new range to be set. The downward momentum of the market (the change, FFC, etc.) provides a probability that the transition is downward. What we have seen over the last few weeks, was a narrowing of market range. Assuming that the maximum change of 519 occurs upward (+), then a maximum of 8500, becomes the new upper bound; and the new range [8000, 8500]

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