Docphil Market Outlook and News

The CBOE Volatility Index (fear gauge) has just closed at 46.67 on 10th of February and is edging ever so close to the 50 day moving average. It would not be impossible to see it cross over and above its 50 day moving average if investors lose confidence in the bank bailout plan of the Obama administration and loses confidence in the overall economy.

Please take a look at the 3 month VantagePoint chart of the Dow Jones Industrial Average Index below:


The Predicted 4 day EMA is below the 10 day Actual SMA (bearish); the Predicted Neural Index is at 0 (bearish); the Predicted Short Term Difference and the Predicted Long Term Difference is negative (bearish) and they are trending downwards (bearish) and the Predicted Short Term Difference at -56 is below the Predicted Long Term Difference at -12 (bearish).

The Predicted Stochastic at 37.16 is below its trigger of 52.62 (bearish) and trending downwards (bearish); the Predicted MACD is negative or below its 0 threshold (bearish); and the Predicted RSI is at 52.19 which is midway between its high threshold of 70 and its low threshold of 30 (neutral i.e. it could go either way).

So the overwhelming indications given by the VantagePoint indicators is that for the near term (from several days to few weeks), the overall stockmarket is in a bearish phase.

Bailout News

Negotiators hoped to seal agreement on President Barack Obama’s economic stimulus package Wednesday after making good progress in the first rounds of closed-door talks.

Obama’s negotiating team insisted on restoring some lost funding for school construction projects as talks began Tuesday in hopes of striking a quick agreement, but by late in the day it appeared resigned to losing up to $40 billion in aid to state governments.

Earlier Tuesday, the Senate sailed to approval of its $838 billion economic stimulus bill, but with only three moderate Republicans signing on and then demanding the bill’s cost go down when the final version emerges from negotiations.

Negotiators were working with a target of about $800 billion for the final bill, lawmakers said.