1/14/2009 8:39:01 AM

A Doji can be good and bad here.

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Stock Barometer Analysis

The barometer remains in Buy Trend Mode as the market hasn't violated its current uptrend. That could get tested today.

The Stock Barometer is my proprietary market timing system. The direction, slope and level of the Stock Barometer determine our outlook. For example, if the barometer line is moving down, we are in Sell Mode. A Buy or Sell Signal is triggered when the indicator clearly changes direction. Trend and support can override the barometer signals.

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Stock Barometer Cycle Time

Today is day 33 in our Up Cycle.

The Stock Barometer signals follow 5, 8, 13, 21 and sometimes 34 day Fibonacci cycles that balance with 'normal' market cycles. Knowing where you are in the current market cycle is important in deciding how long you expect to maintain a position.

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Potential Cycle Reversal Dates

2009 Potential Reversal Dates: 1/20, 2/11. We publish these dates up to 2 months in advance.

We're still looking for a move higher into 1/20, although each day the market remains weak, lessens the likelihood of that move.

My Additional timing work is based on numerous cycles and has resulted in the above potential reversal dates. These are not to be confused with the barometer signals or cycle times. However, due to their past accuracy I post the dates here.

2008 Potential Reversal Dates: 12/31, 1/11, 2/1, 2/13, 3/6, 4/5, 4/22, 5/23, 6/6, 6/27, 7/13, 9/2, 10/3, 10/22, 11/10, 12/11. 2007 Potential Reversal Dates: 1/10, 1/14, 1/27, 1/31, 2/3, 2/17, 3/10, 3/24, 4/21, 5/6, 6/15, 8/29, 10/19, 11/29, 12/13, 12/23, 12/31, 1/11/08. 2006 potential reversal dates: 1/16, 1/30, 2/25, 3/19, 4/8, 5/8, 5/19, 6/6(20), 7/24, 8/20, 8/29, 9/15, 10/11, 11/28. 2005 Potential reversal dates: 12/27, 1/25, 2/16, 3/4, 3/14, 3/29, 4/5, 4/19, 5/2, 6/3, 6/10, 7/13, 7/28, 8/12, 8/30-31, 9/22, 10/4, 11/15, 11/20, 12/16.

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Use the following spread/momentum indicators to assist in your trading of the QQQQ, GLD, USD, USO and TLT. They are tuned to deliver signals in line with the Stock Barometer and we use them only in determining our overall outlook for the market and for pinpointing market reversals. The level, direction, and position to the zero line are keys in these indicators. For example, direction determines mode and a buy signal 'above zero' is more bullish than a buy signal 'below zero'.

QQQQ Spread Indicator (NASDAQ:QQQQ)

The QQQQ Spread Indicator will yield its own buy and sell signals that may be different from the Stock Barometer. It's meant to give us an idea of the next turn in the market.

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Gold Spread Indicator (AMEX:GLD)

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US Dollar Index Spread Indicator (INDEX:DXY)

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OIL Spread Indicator (AMEX:USO)

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Supporting Secondary Indicator

We daily monitor hundreds of popular and proprietary technical indicators that break down market internals, sentiment and money flow to give us unique insight into the market. We feature at least one here each day in support of our current outlook.

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Summary of Daily Outlook

We remain in Buy Trend Mode as the market's trend remains upwards. Tuesday's candle was a doji, which is the first step in a potential reversal - the next step in candlestick trading is the confirmation - which is a higher close. Given that the futures are lower and the market will likely open on a gap down (which is also what I like to see for a bullish reversal) if the market closes higher today, we'll have a bullish engulfing and it's off to the races on the bullish side for a move higher into the inauguration.

If you have any questions or comments, email me at Jay@stockbarometer.com.

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Regards,