Details of the US government stimulus package and a strong labor report helped bring back considerable liquidity to the stock market. There is now less talk of US recession.

On Thursday, the DJIA (+108 +0.88 pct to 12378), S&P 500 (+13.5 +1.01 pct to 1352), and the Nasdaq Composite (+44.5 +1.92 pct to 2361) were lifted by a stimulus-based commodity rally and interest in technology that was spurred on by expectations that Microsoft (MSFT) would report a solid revenue and earnings gain after the close.

On the economics front, the US jobless claims report indicates that the labor market has been a little stronger than anticipated with all the financial system chaos and talk of recession. Existing home sales in the US for December fell -2.2 pct and the median home price plunged -6 pct to $208,400, according to the National Association of Realtors.

France's Societe Generale (SCGLY) apologized to shareholders for a EUR4.9 billion ($7.14 billion) "fraud" related, they claim, to an individual rogue trader. Inspector Clouseau has been called in. (LOL)

Apparently the SOCGEN loss has turned the discussion at the prominent World Forum at Davos Switzerland from a focus on recession to one on fraud. As usual, bankers are not prepared to put the sunlight on the problem, which happens to be on their excessive risk-taking culture combined with a lack of adequate risk management systems.

On the earnings front, Ford Motor's (F) 4Q loss dropped to -$2.8 billion vs a loss of -$5.6 billion a year earlier.

After details of the expansive stimulus package from the President were released, along with word that Congress had come to an agreement, Crude Oil futures ($WTIC) surged $2.42 per barrel. $GOLD rocketed +$22.70 per troy oz to close the session at 905.80.

The $USD dropped -0.79 pct to 75.70 and the long bond (30-year US Treasury) plummeted -2.03 pct while the yield ($TYX) jumped +4.26 pct to 4.353 pct. The yield on the 10-year note ($TNX) lifted +6.25 pct to 3.64, while on the two-year the yield soared +9.00 pct($IRX) to 2.30 pct.

Clearly, there was a flight of capital out of cash and fixed income into economic-sensitive instruments, hoping that the $150 billion stimulus package would kick-start the massive US economy, which some traders find a dubious assumption.

In any case, the Asian markets, excluding Hong Kong (-2.29 pct), but including the Nikkei 225 (+2.09 pct) closed broadly higher before European shares soared. The UK FTSE 100 gained +4.75 pct; the German DAX gained +5.93 pct and the French CAC 40 gained +6.01 pct on the day.

In New York, the Russell 2000 small cap index actually dropped -0.7 (0.10 pct) to 692.72. But the techs and oils were pumping. The two best sector performers were XLE (oils) at +3.52 pct and the XLB (basic materials) +1.59 pct. The worst were the XLU (utilities) at -3.11 pct, as capital in search of income jumped from those equities to the bonds, and then to the commodity-producer equities. It was a mixed up session.

Among the leading industry groups were the goldminers ($XAU +5.83 pct), Computer Hardware ($HWI +4.69 pct), Computer Disk Drives ($DDX +4.22 pct), Internet ($IIX +4.54 pct) and Big Oil ($XOI +4.33 pct).

Many of the Cara 100 stocks were up +8 pct or more including RIMM +8.0 pct, YHOO +8.4 pct, QCOM +10.3 pct, MICC +11.3 pct and NOK +12.5 pct. Cara 100 Nokia (NOK) is quite a story.

Compare the (Cara 100) Millicom (MICC) to the NOK chart. These companies are selling wireless products and services in the emerging markets. When NOK performs well, MICC is likely to out-perform it. Same too on the downside.

Overnight, the Asia-Pacific equity markets were very strong (Hong Kong’s Hang Seng +6.73 pct; India’s BSE 30 +6.62 pct; and Japan’s Nikkei 225 +4.10 pct) and at 9:12am ET this morning the European bourses have followed suit: UK FTSE +1.16 pct; Germany’s DAX +2.01 pct; and France’s CAC +1.45 pct.

At 7am ET, the DJ Futures were up +85. Crude March e-miNY futures lifted +0.62 pct to 90.00. Treasury prices were down and yields up.

By 8:20am, the DJ Futures were at +87 and the Crude futures up to 90.275.

But the big story, as expected from the market’s general reaction to the US econ stimulus package, was in precious metals. Spot gold at 7am had jumped to 920.35 (+10.75/0z +1.18 pct since midnight). Spot silver was up +0.18 (+1.10 pct) to 16.54. But, the Platinum spot was rocking, up +65 (+4.03 pct) to 1678/oz, and the spot palladium was up +7 (+1.90 pct) to 376.

By 8:20am, Spot gold was at 918.54 (+8.94/0z). Spot silver was up +0.13 (+0.79 pct) to 16.49. The Platinum spot was still rocking, up +75 to 1688/oz, while the spot palladium was unchanged from 7am at 376.

Obviously, the day will open strongly in NY. But, caution is urged.

---

Comments & Outlook

[NOTE: I hope that Jeff was able to update the tables in the few minutes since we got back on the air. If not, he'll do it later.]

There is always a short-term boost to equity prices when Interventionists attack the market as hard as they did this week. A combined -75 basis point cut in the Fed Rate and a $150 federal stimulus program aimed largely at the average wage-earner is not to be sniffed at.

But, despite the enormity of these actions, the US economy is so much bigger that, while impressive, the intervention is like a tug boat moving a modern tanker ship around in a harbor that is experiencing a hurricane.

At the end of the day, that tanker is going to land pretty much where natural law moves it. Same thing will happen in the equity markets.

What I am saying is that the rally attempt has become a short-term rally and that I expect it to fizzle out at some point fairly soon (days, weeks or a couple months at the longest). The rising commodity prices are beneficiaries, for now. But in reality the oil price and the Treasury yields can only lift so high before they become a burden. Soon, with all the other problems to be reported by bankers and corporations, the back of this rally will be broken and prices will slide again.

I called the turn early on Tuesday morning, and prices have been rising as anticipated. Soon, however, there will be another turn, this time south. Prices will tumble again. I still see a Dow 30/Nasdaq Composite reading of 10000/2000 in the crystal ball, for what its worth. Of course, I will be watching those prices and the emotions of traders by the hour, especially the longer this rally moves prices higher.

And I will do the same after prices start to fall, especially the further they fall. At the Bear market bottom, I expect to see widespread capitulation and anguish. I hope to see you there, awaiting the Buy Alerts that will pop up all over the Cara 100, at the time.

It will be the best of times.

---

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
ABX	50.63	82.45	70.33	63.60	Sell alert (trig. 7 days ago [on 2008-01-15 at $50.25, +0.76% chg], after a 8 day DZ)
GG	38.06	75.57	66.08	64.93	Sell alert (trig. 7 days ago [on 2008-01-15 at $36.60, +3.99% chg], after a 1 day DZ)
NOK	36.48	75.05	49.69	63.70
SLW	16.71	73.55	54.74	56.13
PBR	102.43	73.29	52.12	48.67
KO	59.88	71.82	43.83	34.68
COST	67.15	70.92	52.42	54.57
MBT	86.60	70.73	46.36	39.42
BBBY	30.72	30.35	52.46	72.47	Buy alert (trig. 8 days ago [on 2008-01-14 at $26.66, +15.23% chg], after a 1 day AZ)
BC	17.17	15.45	40.20	73.41	Buy alert (trig. 4 days ago [on 2008-01-18 at $15.09, +13.78% chg], after a 3 day AZ)

At least one RSI value <30:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
BC	17.17	15.45	40.20	73.41	Buy alert (trig. 4 days ago [on 2008-01-18 at $15.09, +13.78% chg], after a 3 day AZ)
KSS	43.07	17.02	36.93	60.48	Buy alert (trig. 6 days ago [on 2008-01-16 at $39.57, +8.85% chg], after a 9 day AZ)
SBUX	20.45	18.40	37.90	63.67
JCP	43.63	22.48	45.17	67.21
TM	99.70	22.61	29.91	42.21	Buy alert (trig. 2 days ago [on 2008-01-23 at $99.25, +0.45% chg], after a 1 day AZ)
WAG	34.99	24.47	38.73	56.59	Buy alert (trig. 6 days ago [on 2008-01-16 at $33.24, +5.26% chg], after a 2 day AZ)
SNDK	26.75	25.87	17.67	34.82	Buy alert (trig. 1 days ago [on 2008-01-24 at $26.75, +0.00% chg], after a 5 day AZ)
SWK	46.06	25.88	31.52	43.20
UBS	43.68	27.45	35.51	54.12	Buy alert (trig. 3 days ago [on 2008-01-22 at $40.56, +7.69% chg], after a 2 day AZ)
DELL	21.09	27.99	29.34	47.27	Buy alert (trig. 1 days ago [on 2008-01-24 at $21.09, +0.00% chg], after a 2 day AZ)
PAYX	33.09	28.65	23.54	42.36	Buy alert (trig. 2 days ago [on 2008-01-23 at $33.34, -0.75% chg], after a 1 day AZ)
BMY	23.35	28.91	23.35	28.35	Accumulation Zone (for 3 days)
BDK	70.23	29.55	39.12	59.37	Buy alert (trig. 6 days ago [on 2008-01-16 at $65.99, +6.43% chg], after a 9 day AZ)
HBC	77.08	29.64	33.26	47.82	Buy alert (trig. 2 days ago [on 2008-01-23 at $76.62, +0.60% chg], after a 4 day AZ)
DOW	36.01	31.58	26.86	44.85
LLTC	27.97	32.73	24.54	42.92	Buy alert (trig. 2 days ago [on 2008-01-23 at $28.05, -0.29% chg], after a 2 day AZ)
TGP	28.18	32.97	31.49	29.47
GOL	19.05	33.09	28.57	29.20	Buy alert (trig. 1 days ago [on 2008-01-24 at $19.05, +0.00% chg], after a 2 day AZ)
BA	77.62	33.85	21.34	34.87	Buy alert (trig. 1 days ago [on 2008-01-24 at $77.62, +0.00% chg], after a 1 day AZ)
DIS	29.23	34.15	24.53	41.67	Buy alert (trig. 2 days ago [on 2008-01-23 at $28.52, +2.49% chg], after a 2 day AZ)
TS	38.40	34.19	24.99	42.67
TCK	31.07	34.65	28.43	41.34
YHOO	21.69	34.80	28.87	47.71	Buy alert (trig. 4 days ago [on 2008-01-18 at $20.78, +4.38% chg], after a 1 day AZ)
ADBE	34.64	34.88	24.39	20.88
CSCO	25.11	37.75	24.90	48.31
GE	34.65	38.21	28.46	45.33
GSK	47.95	39.87	36.36	18.13
DEO	79.82	45.54	20.86	48.75
PTR	146.31	47.14	31.60	29.09
JNJ	63.51	49.31	34.41	15.56
PG	66.15	50.18	27.54	22.90
IBN	59.06	69.95	47.47	27.96	Sell alert (trig. 7 days ago [on 2008-01-15 at $66.03, -10.56% chg], after a 3 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	29.56	-0.39	-1.30%	12.22%	19.53%	9.44%	13.21%	-4.27%	-22.11%	-27.35%
GM	25.62	-0.08	-0.31%	12.12%	12.47%	-3.47%	4.96%	-33.78%	-26.06%	-21.75%
JPM	44.96	-0.76	-1.66%	8.52%	11.67%	0.29%	6.62%	-2.83%	-0.84%	-10.72%
AXP	47.11	0.90	1.95%	6.49%	-4.01%	-11.51%	-7.70%	-20.07%	-22.99%	-20.06%
IBM	106.91	0.81	0.76%	5.20%	8.75%	-4.25%	2.12%	-5.35%	-7.97%	9.76%
C	27.33	0.97	3.68%	4.15%	-0.58%	-11.78%	-5.50%	-34.65%	-44.58%	-50.16%
INTC	20.69	0.71	3.55%	4.07%	-9.05%	-24.24%	-18.38%	-20.45%	-15.65%	-0.72%
MCD	54.00	0.99	1.87%	3.03%	-6.04%	-10.46%	-7.06%	-5.51%	4.75%	22.28%
WMT	48.91	-1.25	-2.49%	2.99%	4.29%	0.35%	4.29%	11.49%	1.85%	0.62%
DD	45.45	0.09	0.20%	2.60%	1.50%	0.49%	3.91%	-4.40%	-8.92%	-9.61%
UTX	72.56	1.58	2.23%	2.14%	0.83%	-7.19%	-3.52%	-5.14%	-2.92%	8.57%
CAT	65.25	0.17	0.26%	1.52%	-2.95%	-10.25%	-7.62%	-13.91%	-20.10%	9.24%
HPQ	44.89	1.70	3.94%	1.24%	1.01%	-14.20%	-9.88%	-13.00%	-5.71%	5.90%
AA	30.81	1.62	5.55%	0.59%	-1.41%	-16.75%	-14.72%	-19.35%	-25.31%	-3.11%
GE	34.65	0.06	0.17%	0.26%	-3.21%	-7.67%	-5.74%	-13.87%	-13.85%	-5.43%
MSFT	33.25	1.32	4.13%	0.06%	-3.46%	-9.10%	-5.59%	6.40%	7.95%	6.95%
XOM	86.00	2.55	3.06%	-0.61%	-5.05%	-8.18%	-8.03%	-6.65%	-5.33%	14.82%
PFE	23.05	0.19	0.83%	-1.50%	-3.64%	-1.20%	0.61%	-3.88%	-7.39%	-14.06%
DIS	29.23	0.71	2.49%	-2.01%	-3.08%	-12.06%	-8.20%	-16.63%	-15.88%	-17.31%
MMM	75.73	-0.37	-0.49%	-2.03%	-5.56%	-12.21%	-8.44%	-12.04%	-15.56%	-4.73%
HON	56.20	-0.30	-0.53%	-2.31%	-2.43%	-8.66%	-6.18%	-4.29%	-7.38%	26.52%
BA	77.62	1.05	1.37%	-2.82%	-3.34%	-13.77%	-10.39%	-17.65%	-25.22%	-11.39%
MO	74.89	2.04	2.80%	-3.88%	-5.45%	-3.47%	-0.05%	3.50%	10.04%	13.50%
PG	66.15	-0.09	-0.14%	-3.91%	-8.81%	-10.54%	-8.52%	-7.33%	5.07%	0.98%