Weekend notes -- March 10 ,2007

Last Friday's market reaction to seemingly bullish Feb employment report was anything but bullish, it was pretty much a gap-then-crap for major indices and a lot stocks, even though the market mounted a late session rebound to close nearly flat, the tape just did not look good for the bulls.

On the weekly charts, despite of the fact that all major indices had some respectable gains for the week, they just look pale in comparison to the huge drop in the prior week. Technical indicators are overall on the bearish side.

On the daily charts, while all major indices made a successful test of EMA200, their attempt to test the overheaded EMA50 clearly fall short. Technical indicators are mixed.

Next week or two will be crucial: the longer the rebound stalls below EMA50, the higher the likelihood that the market will have another leg down. Personally, I don't expect the bulls to give it up right away, and it is entirely possible that a test of EMA50 may come up, but at this stage, I doubt that the bulls will be able to hold the market above EMA50, and I firmly believe that the top is in for the major indices and that the overall down trend will persist for the next 2-4 months if not longer.

weekly calls will be posted later....