Stock Tiger Stalking Stocks™ For Monday January 14, 2008  You may subscribe to this newsletter free - subscribe Close Friday Dow -246.79 at 12606.30, Nasdaq -48.58 at 2439.94, S&P -19.30 at 1401.03   Waiting. On the Fed to reduce rates. On the housing to reach a bottom. On retail to turn up. On banks to fully write off all their bad debts. On jobs to stabilize. On the dollar to strengthen. On the trade deficit to improve. Too many things and probably only one to happen soon - Fed will cut again. This may temporarily give the market a boost but it should not have much affect on the economy as it takes so long. If we do get a significant market recovery back toward the highs it seems it will not be caused by outside events or news but only from investors thinking prices of stocks are too low.   The housing situation may take several years as foreclosures increase more homes will be available so lowering prices even more. Consumers are still spending at very high levels and not saving money as is shown in the huge trade deficit the US has. This means a ton of credit card debt and some of of it is likely to turn into bad debt in the future so the banks will have more to deal with as people default on their card payments. Inflation still is present and while the Fed may lower rates to try and help the stock market they should raise them if inflation pressure becomes stronger. The Greenspan Fed helped create the current problem of first the stock market bubble and then the housing one by keeping rates too low too long. This helped the markets and kept people spending and now we are paying for it.   This chart is the Dow - inflation adjusted and shows how the Dow is still under its 1999 high.       The future on many levels does not look bright. The charts of the major US markets look sad and broken at least for the short term and some for the intermediate term as well.   Terry Laundry http://www.ttheory.com makes a long range T Theory forecast,  which for this period is based on the NYSE Advance-Decline Line T coming out of the late 2002/early 2003 low, and which technically called for a September 2007 peak as you can read on his site. This concept is, to him, the best example of the time symmetry he calls the Law, or more politely, the Theory of Matched Trend Time. It had no serious time projection errors since 1929, so he concludes that at this time his T Theory is absolutely and unambiguously bearish for the next few years, most likely into late 2010. There have been 14 market declines over almost 80 years for an average interval of 5.7 years.   He shows a table that has the last decline from March 2000 until October 2002 where the S&P declined 49% and a previous one from August 1987 to Dec 1987 of 33%. If this decline were to make the 35% decline before the current bear market ends it would take the S&P 500 to about 1010, a level last seen in 2003.   Bob Carver http://www.marketclues.net does not see it that way as he constructs his T using only the volume from stocks in the NYSE not the ones related to bonds and he sees a possible continuation of the bull market until 2010 or even 2013 - though at a slower pace. He points out a 90-year mega T that actually could run until 2019.   Both of these are long range forecasts for many years to come and both worth watching for confirmation but it will take a few more months. Friday ended with the third straight weekly decline for the stock market. Stocks closed sharply lower on concerns that the credit crunch was affecting consumers. American Express  increased its loan loss reserves due to an increase in defaults and slower card member spending. Capital One on Thursday reduced its profit outlook due to increased loan delinquencies and additional legal reserves. The US economy may already be in recession and while the Fed worries about consumer spending it would probably be better if consumers did spend less and finally let the excesses wash out of the system instead of the Fed always throwing more money at the problem. The good thing shorter term is that so many are discouraged about being long that at least a brief rally is to be expected quite soon. In 17 of the last 38 years the Dow has been down in January 17 times with an average decline of 11.5%. If that were to happen this year the Dow would go to 11,804. I would not be surprised if the market does recover and actually makes new highs but am not ready to be long and holding a basket of stocks while still in the downtrend. The break out and break down plays have worked well and taking short term gains and then setting tight stops has worked out held the gains.   Here is how the major indexes did this past week.   And the top and bottom sectors for the week.     The Dow daily chart shows that the Fibonacci 50% level from the July 2006 low is still holding. The 62% retrace would be at 12,050. The 50 and 200-day EMA are almost touching and it would be common for there to be a significant reaction if they meet. A rally in my opinion would be the reaction in an attempt to keep the 50-day above the 200-day.     The 27-year monthly Dow chart shows it is back to its trend line and if broken has some horizontal support lower.   The Nasdaq short term chart is not pleasant and fell below the 62% retrace from the March low to October high. This is bearish and it also has the 50-day nearing the 200-day. It is however back to oversold territory. The longer term weekly chart shows that the 200-week EMA is at the lower trend line at 2300. Stochastics are now below 20 but MACD does not yet show any meaningful divergence. The semiconductor index SOX is at an important level for a bounce as shown on this weekly chart. A break here could drop it another 100 points or more. The EMAs have just crossed and they can try and cross back up this week though you can see why the bears hope the drop continues. The S&P 500 daily is similar to the Dow at this point at the 50% level. The weekly chart of it shows the trend support and below that the horizontal support and 200-week EMA. To me it would seem a better longer term set up if we do see a test of the lower  levels. Seeing the multi support not so far below is a bit disturbing if you are holding long as they may be calling. Like holding a stock that has a gap below and wishing it would just fill the gap and get it over with. This monthly S&P 500 chart you have seen before as it shows the bear market when the candles are below the 20 month EMA and the RSI is below 50. We are not there yet but pretty close. The QQQQ Nasdaq 100 monthly chart shows how the final rally did not even reach the first Fibonacci level and now the possible test of the 50-week EMA. As this is a monthly chart the candle is not complete so it may look better at the end of the month. The NYSE actually shows the stochastics moving back over 20 but this chart is not yet encouraging. The Russell 2000 weekly broke support but so far is holding above the 200-week EMA. Stochastic indicator is back under 20 and a move back over would be bullish. Now additional indicators that offer some short tem hope for bulls. The NAHL at levels reached in the the past where rallies begin. Actually the VIX is not yet so encouraging. 23 is a relatively high level but the higher the more fear is expressed and fear can lead to stronger rallies.  This does not show an extreme fear level as we have seen in the past. The NYSE percent of stocks over their 50-day average has not yet dipped to the lower buy range.   The BPCOMP however is at extreme levels of bearishness. If too many are on one side the direction change is not far away.   As a glance of the real broad market Wilshire 5000. (each point represents about $1 billion in market cap) This is under the 50-week EMA but above trend and 200-week EMA. This shows in total the market is not in bad shape at all. It is still at the same price as in 2000 so if you held, due to inflation you have lost money, but it still is not now bearish. As we now have many ProShares and other ETFs to use to short the market we have not shown this chart in a long time. This fund you can only buy each day putting in your order one day for the next day execution and was a popular way to play a bear market. It is now back over the 50-week EMA. Stochastics though are at 80 again and in the last 10years each time this happened it would pull back. IF we have entered a long term bear market this will have plenty of room to run so worth watching as an indicator. It does not move as fast as some of the new ETFs so is less volatile for those who prefer that type of movement. If we are in a multi-year correction this one could do very well. Oil pulled back this week to $93.   The Japanese Yen still bullish. Gold continues and we had several gold stocks on the watch list that triggered. The run is steep so we maintain a cautious position as a pullback is likely at any time though these type runs can get quite over bought. The US Dollar had run to resistance and is pulling back. It may be basing now so will see if the low can hold. The 30-year bond yield is above its low so does not yet predict rising long term rates. Value Line is about 1900 stocks and was a very good indicator of the broad market for may years. It has been a favorite chart but this month so far is not looking good at all on this monthly chart. Support is around 1900.       Weekly economic calendar from briefing.com with several possible market moving reports this week.      A look at some longer term stocks. PYR.v  With cash flow last quarter of 6 cents per share and net profit at 1 cent and its recent acquired property's proved plus probable reserves net income value of over $52 million the stock price is very clearly too low. But the volume is so light it sits at this level. The application to be added to the Toronto Exchange is in process and at some point I think we will see the price level jump and when over $1 will not look back. We expect upward to $0.20 for yearly net so now the price is extremely low for the industry. NNRI  NNRF Inc put out a very comprehensive review of activities for the shareholders this week. NNRF, Inc. Announces Review of Corporate Activities 2007 Most of your questions submitted were answered in it. A few that were not are in our NNRF Q&F page where you are welcome to ask questions for management. http://nnrf.stocktiger.com/ In the review the company they highlight the 2007 achievements and go over upcoming events and projects in the works and this very professional review is a must read. The stock has now held this range for a couple of weeks and has the center Bollinger band at $1.17 so a move back over that would be bullish. The stock on January 2 again is on the Naked Short SHO list. This means that there are shares that have been sold where there was no stock delivered by the seller so it will have to be bought. Eventually when those sellers do buy back this will help the stock price rise. PLTG  announced this week that they have had positive revenues from oil sales for the third fiscal quarter ending December 31, 2007 and expect to be operationally profitable within the next few months. The stock has been slow to respond to the results but as more wells come on line, revenues will increase. Stochastics are back over 20 but MACD has yet to show a positive crossover. The 200-day is still below the 50-day so this is bullish. SIPC  We highlighted Sipp Industries this week with a suggested buy range between $1.10 to $1.25 and the price has stayed within that range. Our report here. This week the company announced that they have a co-pack agreement with Santa Fe Springs, Inc in Albuquerque, New Mexico, for packaging of Sipp's beverage pouch and bottling of its Private Reserve spirits. This is a step closer to the distribution to begin this spring. The chart is not yet available at Stockcharts so please ask them to add SIPC to database AddHere  Just put in symbol and select OTC/BB on list. Thanks. The volume is low as not many yet know of the company as it is new. It seems in a good building range and would be good for the stock to have a thousand stock holders and as the base builds the stock price will follow while the company begins Private Reserve contracts and shipments and the pouch distribution. We are in no rush on this but expect limited shares to be available near these level. Building a base is good for the stock longer term. HENC We got stopped out of this very quickly so not sure if any follow it now but wanted to mention the they filed a Form 3 with the SEC that shows some good insider buying over the last few months. They also have begun drilling on some of their Australian property. You can find that information at pinksheets.com   Additions to our watch list: We also add daily so check the site each day RRC Over $53.05 has a shadow at $54.222 ALTU Some like the gap down plays - on good volume as a continuation CHW  Over $13.14 MATK  Back over $34.28 or the high of $34.70 EPIC  Over $12.10 to the 200-day PSPT   Back over $14.90 or high of $15.26 REGN  Over $24.90 or $25.00 HGSI  Over $12.00 GG Gold - as a scalp if it an gold move over about $38.55 or high of $39.00   At this site there are several nice photos that you can use as desktop wallpaper as they have many sizes.   http://sensitivelight.com/wallpaper/   This one  I am using - very clean. That's a full lid for today - will see you all during the week. We have published a donation page for the ease of you giving to a charity of your choice. If you have benefited from our site we encourage you to share with a charity. We have a few recommendations who all use a high percentage of the donations for the actual program use. If you have some we should add please send us a note. Donation Page Check the Earnings Calendar on all overnight holds. Check the current message board also for other good stock candidates as there are several there right now. If you use StockTiger mail you can access your account using simply my.stocktiger.com You can also access your mail using your Blackberry. If you would like a free StockTiger.com email address that uses the Google Gmail interface so you can check your mail from anywhere,  (you do not need a Gmail account) send me (ST) a personal message from the message board  Include your First and Last name and the name you want to use. Your address will then be (your choice)@stocktiger.com Best regards, StockTiger.com

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