Friday, January 11, 2008

Recession Watch

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American Express reports that cardholder spending has slowed, and delinquincies rose. MasterCard Incorporated (NYSE:MA) falls in sympathy.

US Trade Deficit soars to 14 month highs, with record crude oil prices being the catalyst.

Many retailers report weak holiday shopping numbers. This is making the ProShares UltraShort Consumer Services (AMEX:SCC), which is the double inverse of the iShares Dow Jones US Consumer Services ETF (NYSE:IYC), looking pretty nice at this point.

The big brown line that I drew in my previous post about the current dead cat bounce in the S&P500 SPDR Trust (AMEX:SPY) is THE line in the sand. If SPY closes below 138, then we could drop another 5pts (that's 50 ES points) before seeing any form of support.

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