In this group, the Banks ($BKX +8.02 pct) and Broker-Dealers ($XBD +6.90 pct), Airlines ($XAL +7.74 pct) and the Retailers ($RLX +4.18 pct) were very strong.

Other strong sectors were Industrials (XLI +2.73 pct) and Utilities (XLU +2.66 pct). The Dow Transports ($TRAN) gained +7.04 pct.

US equity futures and pre-open prices today indicate that the rally will persist.

Yesterday on the earnings front, Apple (AAPL) reported a +58 pct increase in 1Q net income to $1.58 billion vs $1 billion a year earlier. The share prices were hit because the company fell well short of the Wall Street's guidance forecast. Motorola (MOT) posted a +84 pct drop in 4Q net income to $100 million, which was down from $623 million earnings a year earlier.

The ICSC-Chain Store Sales Index lifted +0.7 pct in the week ended Jan. 19, but the ICSC lowered its January sales expectation to an increase of just +0.5 pct.

Asian markets had been strong early yesterday, but European shares pulled back on Wall Street news spinning regarding so-called “issues” at Apple, and the overwhelmingly negative US media.

Once again, however, the US equity market rallied after Europe had closed.

Today, gold and the Canadian Dollar are very strong. US equity futures are indicating a firm opening. Prices of stocks in Asia-Pacific were much higher and are higher in Europe at the moment.

US Existing Homes Sales data will be reported at 10:00am ET today.

---

Comments & Outlook

Yesterday morning I remarked that, despite the previous day’s overall loss, it looked to me like the market wanted to rally again, but that HB&B was more focused on assuring further rate cuts from the Fed by planting negatives in the mainstream media.

The recession story will still not go away. It’s as if HB&B are deliberately pushing, in their own interest, further rate cuts. That would certainly help bank profitability as banks are always reluctant to cut prime lending rates or credit card loan rates.

As I see it, HB&B is the party issuing the talking points to today’s media, and it’s disgraceful conduct. These bankers are desperate to regain their footing and their power. It must be hard for their executives to look themselves in the mirror after getting on their knees to the Sovereign Wealth Funds. I suppose this is their attempt to even the score.

It’s time for Treasury Secretary Paulson to address this most serious issue. After all, for many years until May 2006, he was the head honcho at HB&B. Is he now going to serve the people or is it business as usual?

Maybe at lunch yesterday, Bernanke and Paulson agreed that the FOMC would announce that desired rate cut on January 30? And then the little birdie somehow escaped to make the rounds of Wall Street.

Six hundred Dow points after that is not to be ignored. Yes, this was short-covering, and yes trader emotions are oscillating at an extreme level, which means that in a heartbeat the buyers could become sellers, but 600 Dow points in a couple hours is remarkable. I think that is confirmation the rally attempt, as I suggested yesterday morning, is underway. And, I think that before that was to be allowed to occur, HB&B needed confirmation there would be another rate cut.

Do you recall my opinion a couple days ago, right before the -75bp Fed Rate cut, when I said it could be -50, -75 or -100bp? Then I said, less is more, meaning that a series of -50bp cuts would not frighten the market as much as one or two really big ones.

Well, I think Bernanke made a huge mistake with the “Emergency -75bp cut” a fortnight before the scheduled FOMC meeting. The tone of the action word “Emergency” was already one hammer, and a cut of -50bp was then all that was needed, followed by the FOMC assessment of the market reaction that could have been followed again by a further -50bp cut on the 30th. Then traders would have enjoyed some ‘warm fuzzies’ that the Fed was in control rather than in a panic, which I think is the case today.

So, I have to mark the professor down to a C-minus, I’m afraid.

Do you also recall that over the past year I said that the Fed would cut rates not on account of the economic data but under pressure from Wall Street in a Bear market? Market prices drive the FOMC’s policy decisions, which means the Fed reacts rather than acts. That’s the failing of the Fed, and the reason why the Fed Head should not be a college professor or politician.

Whoever is the Administration’s choice for the next Fed governor, I certainly hope it is a person who has been tempered like steel in the heat of business, somebody like Meg Whitman or Warren Buffett. A business resume ought to count for something in America.

Back to the market, I believe, more than previously, that the market will rally for a few weeks now, during which smart traders will sell their riskiest positions into strength. They ought to also cover their portfolios with puts and other hedge tactics the moment that the rally appears to be running out of steam.

The announcement today of a $7.14 billion so-called fraud by a rogue trader at Societe General is the start of a series of these types of announcements, I believe. The truth will come out later. Suffice it to say that the risk management system at most of HB&B and many hedge funds is laughable.

The stuffed suits that the valuable HB&B risk-takers and high producers refer to as head office ‘floaters’ wouldn’t know a derivative swap from the things they do socially. Yet, those are the people in control. They were in control when Barings Bank had to be sold for $1.00 after a rogue trader there caused a $1.8 billion loss in 1995. And, they were in control when Amaranth dropped about $6.6 billion after another so-called rogue trader got out of hand.

Everybody seeks a scapegoat, I guess. The bottom line is that these trading losses are caused by extreme trading that is improperly hedged. It happens over a period of time, not suddenly like a bank robbery.

Moreover, the write-downs of improperly valued financial assets, not only by financial institutions but by many corporations caught holding the bag, has just begun. At the bottom of the stock market cycle, I expect to see at least a trillion dollars (possibly trillions) written off and many once respectable organizations fail. I expect to see a massive increase in lawsuits because HB&B conspired to call a phony market in these products. They made representations and took action based on errors and omissions of knowledge, and their insurance companies are now failing and leaving them stranded. It’s a mess that regardless of a rally in equity market prices in the short-run will take time to clean up and recover from. At the end of the day, the business and financial landscape will have changed.

This result will speak loudly to my concern for the past three years that all was not right in capital markets. I was right to be cautious to the point where I was being called bearish. But, and you know this to be true, I also happened to call the Bull rallies. Almost every recommendation I have provided in this blog has been to list a large number of stocks to buy.

Popularity, I suppose, is envied in some quarters. But, the fact is that, while I don't really care what others say or think about me, I do think the public criticism by some people is ridiculous.

If cxo, for example, can find a single individual “guru” on their so-called list of guru’s who stepped up to the plate two days ago, at 6:13am ET on Tuesday morning, in the midst of a market crash, and said, “Buy the market” and give a list of stocks like the goldminers, the BBBY’s and KSS’s, and so forth, and who produced the market guidance that I provided in my Daily Report that day, I won’t believe it.

Who else a week ago opined that it was time to buy a crashing HSBC (HBC) as 70 would be the floor and to write the 70 puts and buy on extreme weakness, which I listed again for action to be taken at the open on Tuesday. Well, HBC opened two days ago at 70.42 and is now 76.62 and going higher.

Anyway, I say to cxo, “Put up or shut up”. Strike me from the list, I am not a guru, have never pretended to be one, have never have promoted myself to the media, and I’m sick and tired of pathetic attempts by certain people, with almost zero barrier to entry, nor in many cases zero credibility in the securities industry, to call themselves “ratings experts” or persons or organizations who can set themselves up to judge the work of professionals. It’s just another fraud among many that I see today.

For the record, this rally is not going to be the start of a new Bull phase in the long-term cycle. There are too many fundamental issues in the capital markets and the global economy to be resolved.

What is happening today is that traders’ nerves are irritated from the extreme volatility.

Trading is a tough business. It’s not a place for wusses.

All I am trying to do is show people how they can toughen up. If they have learned how to play the game effectively against the likes of HB&B, with some help from this blog and the discourse, then it is my gift to them. There is nothing more important in life than to give back to society what is valuable to them.

Nothing, in my opinion, is more valuable than to learn how to trade prices in capital markets, but I'll leave that judgment, as well as their assessment of why this is a popular blog, up to others.

---

Links & Charts

---

International Economics Review

US Economic Calendar.

---

Knobias Cara100 Tables

---

Cara 100 Daily RSI-7 Charts

At least one RSI value >70:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
COST	68.61	81.42	56.69	64.94
ABX	48.37	76.08	66.74	53.57	Sell alert (trig. 6 days ago [on 2008-01-15 at $50.25, -3.74% chg], after a 8 day DZ)
IBN	61.39	75.84	51.81	34.65	Sell alert (trig. 6 days ago [on 2008-01-15 at $66.03, -7.03% chg], after a 3 day DZ)
HDB	116.24	73.97	39.83	36.28
PBR	98.34	73.06	46.37	37.32
ATVI	26.66	70.09	59.12	38.96
CHA	76.80	70.03	53.26	44.39	Sell alert (trig. 8 days ago [on 2008-01-11 at $85.00, -9.65% chg], after a 1 day DZ)
SLW	16.07	70.01	53.82	44.85
WMT	50.16	67.48	68.12	76.53
TGT	54.39	42.11	49.77	75.81
AMAT	18.10	41.13	49.17	74.14
WHR	81.01	39.74	50.27	73.46	Buy alert (trig. 3 days ago [on 2008-01-18 at $71.53, +13.25% chg], after a 1 day AZ)
BDK	73.05	34.22	46.06	74.23	Buy alert (trig. 5 days ago [on 2008-01-16 at $65.99, +10.70% chg], after a 9 day AZ)
BBBY	31.38	33.67	55.46	81.11	Buy alert (trig. 7 days ago [on 2008-01-14 at $26.66, +17.70% chg], after a 1 day AZ)
JCP	44.43	21.92	47.53	73.45

At least one RSI value <30:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
BC	16.41	15.52	32.14	64.60	Buy alert (trig. 3 days ago [on 2008-01-18 at $15.09, +8.75% chg], after a 3 day AZ)
KSS	44.03	17.22	40.33	68.94	Buy alert (trig. 5 days ago [on 2008-01-16 at $39.57, +11.27% chg], after a 9 day AZ)
SBUX	19.97	18.35	28.53	58.52
UBS	42.38	19.42	29.31	44.83	Buy alert (trig. 2 days ago [on 2008-01-22 at $40.56, +4.49% chg], after a 2 day AZ)
JCP	44.43	21.92	47.53	73.45
HBC	76.62	24.24	21.54	45.09	Buy alert (trig. 1 days ago [on 2008-01-23 at $76.62, +0.00% chg], after a 4 day AZ)
SNDK	25.45	24.45	15.87	18.81	Accumulation Zone (for 5 days)
BMY	22.59	25.49	16.29	12.79	Accumulation Zone (for 2 days)
WAG	35.45	25.93	40.10	63.62	Buy alert (trig. 5 days ago [on 2008-01-16 at $33.24, +6.65% chg], after a 2 day AZ)
DELL	20.21	25.97	22.52	25.86	Accumulation Zone (for 2 days)
TM	99.25	26.71	26.22	39.71	Buy alert (trig. 1 days ago [on 2008-01-23 at $99.25, +0.00% chg], after a 1 day AZ)
DOW	36.36	27.58	25.03	48.93
KB	66.80	28.57	36.73	47.65
SWK	46.48	29.19	32.84	49.66
PAYX	33.34	29.19	21.55	45.11	Buy alert (trig. 1 days ago [on 2008-01-23 at $33.34, +0.00% chg], after a 1 day AZ)
BA	76.57	29.39	15.99	26.43	Accumulation Zone (for 1 days)
DNA	67.66	29.76	33.86	34.23
GOL	18.73	29.77	24.14	21.62	Accumulation Zone (for 2 days)
DIS	28.52	30.10	15.61	23.87	Buy alert (trig. 1 days ago [on 2008-01-23 at $28.52, +0.00% chg], after a 2 day AZ)
DB	112.03	30.87	21.89	17.02
YHOO	20.01	31.77	21.00	21.64	Buy alert (trig. 3 days ago [on 2008-01-18 at $20.78, -3.71% chg], after a 1 day AZ)
LLTC	28.05	31.79	22.58	43.74	Buy alert (trig. 1 days ago [on 2008-01-23 at $28.05, +0.00% chg], after a 2 day AZ)
TGP	28.55	32.33	32.89	21.16
TS	37.54	32.48	13.57	33.18
ADBE	34.35	33.29	19.58	15.47
CTSH	27.00	33.44	28.37	40.76	Buy alert (trig. 5 days ago [on 2008-01-16 at $26.20, +3.05% chg], after a 1 day AZ)
CSCO	24.03	34.06	21.05	29.41
TCK	29.29	34.33	25.60	18.47
INTC	19.98	35.06	23.52	36.02
CCJ	34.03	35.54	28.29	22.54
GE	34.59	37.89	22.01	44.40
DEO	76.32	39.82	16.91	21.96
ERTS	48.07	39.87	26.77	15.96
STO	25.30	39.88	24.05	21.93
ERJ	41.16	40.19	28.49	21.66
GRMN	64.60	40.40	24.28	33.36
GSK	48.35	40.91	34.76	19.85
SU	83.92	43.22	26.78	11.35
TOT	70.65	44.52	30.86	16.21
MFC	36.31	45.36	25.78	39.73
PTR	145.75	47.38	26.82	27.84
NTES	17.99	48.92	38.18	20.54
CVX	81.45	49.57	27.34	18.50
GOOG	548.62	49.89	27.07	12.70
BHP	60.65	50.15	21.63	34.77
PG	66.24	50.78	24.04	23.27
XOM	83.45	50.86	30.97	27.98
JNJ	64.20	52.20	35.26	18.25
OXPS	27.75	53.09	37.48	23.16
IMO	46.68	53.59	34.28	19.45
ECA	61.00	53.69	30.35	20.86
BBD	26.07	53.73	31.69	23.02
GGB	24.34	53.77	35.04	21.43
RIO	26.57	54.33	27.94	18.84
PDA	41.07	54.88	32.99	20.45
NOK	32.43	56.38	27.85	32.27
MICC	92.41	56.77	35.30	22.90
TEF	86.10	61.51	28.11	21.31
VIP	32.33	67.57	39.02	20.71
MBT	83.30	68.20	40.39	27.38
KO	58.87	69.07	37.02	21.89	Sell alert (trig. 8 days ago [on 2008-01-11 at $63.77, -7.68% chg], after a 2 day DZ)

---

International Equity Markets Review

Europe

Here is the latest session data for the bourses of Europe.

---

Here is the latest session data for the London stock exchange FTSE.

---

Here is the latest session data for the German DAX.

---

Here is the latest session data for the French CAC 40.

---

Here is the latest session data for the Milan Italy stock exchange MIBTEL.

---

Here is the latest session data for the Swiss market index.

---

Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.

---

Here is the latest chart for the Japanese Nikkei 225 index.

---

Here is the latest chart for the Singapore index .

---

Here is the latest chart for the Shanghai Composite index .

---

Here is the latest chart for the Hong Kong Hang Seng index .

---

Here is the latest chart for the India BSE 30 index .

---

Here is the latest chart for the Australian All Ordinaries index .

---

US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

Table: Dow 30 List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
HD	29.95	1.72	6.09%	18.05%	21.06%	12.34%	14.71%	-3.14%	-23.13%	-25.92%
JPM	45.72	4.84	11.84%	16.72%	15.16%	3.65%	8.42%	-0.48%	-3.03%	-8.25%
GM	25.70	2.04	8.62%	15.35%	10.30%	-3.53%	5.28%	-32.99%	-26.82%	-19.44%
AXP	46.21	2.80	6.45%	8.04%	-3.63%	-11.05%	-9.46%	-21.22%	-28.53%	-19.69%
WMT	50.16	0.96	1.95%	6.75%	9.11%	4.04%	6.95%	14.18%	4.26%	4.92%
IBM	106.10	4.86	4.80%	4.19%	8.72%	-4.46%	1.35%	-7.48%	-8.83%	9.29%
DD	45.36	2.80	6.58%	0.53%	6.11%