The S&P 500 made it to the trend line on Friday on light volume. A bounce is likely but if not there then at the 50-day EMA which you can see is also a trend line from August.

Here

Here is a closer view and the trend it is not exact but you can see there is some support near 1400.

The Nasdaq has the weakest chart. It broke the trend on Tuesday then ran back up to test it and the shorts were ready. It then fell from there and made the fifth red candle in a row. This has not happed since the rally began in July. The support is clear so expect a test.

The NASI again was a good predictor of this action. So maybe news contributes to market moves but but this chart predicts peaks pretty well and a few months in advance for the last year at least.

The Russell 2000 broke the trend line on Monday then rallied Tuesday and Wednesday and had a bear flag which we pointed out and then broke below it the last two days .It is also likely to test its recent lows and the 50-ay EMA.

The NYSE had very low volume Friday - less then a billion shares. (Sounds funny. Many of us remember when it first did 100 million shares in a day - it was unbelievable at the time) We had put in the Fibonacci lines already in case the top is in and we should know within two weeks.

When I made the comment about how news may not have such control on the market it was this chart that was in the back of my mind. Look how the number of stocks on the NYSE that were above their 200-day moving average just conveniently hit the same point as it did in 2004 when the market began a correction. Maybe instead, the people who write news consulted the chart then put out the stories that could justify the move. This only means that we cannot only rely on economic reports or worries of inflation or deflation as it may be to try and guess the market direction but look at the charts as they seem to have a much better clue.

The Nasdaq chart showed its weakness and this ration chart compared to the S&P 500 shows just how weak the Nasdaq has been. There is possible support here if you look to the left and this week will make it more clear.

The Nasdaq 100 - top 100 market cap companies in the Nasdaq shows a similar situation. So the money that has been gong into the market has mostly been in the Dow and S&P large caps as a parking place for money. And money - there is a lot.  CNBC Europe on Friday had a show on the big personal boats that have become much moor popular in recent recent years. If you want a pretty nice one you can do ok for about $50 million Euros but the real nice ones are about double that. (that will give you a very nice 2,500 Sq ft lounge on board)  They may be putting money into boats but not into the Nasdaq lately.

The Nasdaq compared to the Dow shows the break of the trading channel very clearly and below you see the trend line break. Do note that the stochastics are at 20 so a dip below and rise above may signal a tradable rally.

The utilities are stronger but now at a position that may break but the 50-day and trend line are below for support.

Gold closed the week at the trend line and 38% retrace from the October low and we would expect a bounce here.

The GDM  miners index 60-min chart shows the possibly bullish channel that it has been in all this month. It is below both averages on this chart and broke below support on the top chart comparison. A break above this channel would still be at least a short term buy for mining stocks.

Someone in the chat room mentioned CUP - Peru Copper as a bounce play Friday. It is on our watch list and it was at support. This copper chart though suggest that for any longer term plays we first need to let this chart play out a bit. It broke some support and it is now at weak support below the 50-day. This pattern does not suggest much in the way of a move back up right now. This may take some time to straighten out and may be better if it falls to another level then consolidates for a few months.

The 30-year bond prices have now dropped right to the support under the 50-day so a bounce is likely here.

Meanwhile the actual 30-year yield has risen almost to the top trend line and closed Friday at $4.76%.

Obviously it will be a slow economic news week and here is the calendar from Briefing.com

Christmas is celebrated in December 25 in most of the world but not in Greece or in Russia. The Julian calendar was introduced by Julius Caesar in about 45 B.C and it was used until about 1500 when countries started changing to the Gregorian calendar. Russian and Greece kept the Julian calendar into the 1900s and when the countries changed in order to be on the "same page" as the rest of the word, the Orthodox churches decided that it was not a good idea to just change the date celebrating Christ's birth just because the government thought it a good idea so they still celebrate the traditional day as they always have. Christmas in Greece and Russia is on January 7. About a white US Christmas would depend on where you live. You remember this scene from a night shot last week. We had only green grass but today for short period of time it was like a storm as you can see and the umbrellas being carried for possible rain got used instead for the huge snow flakes.

Another note. In Russia as in some other countries the custom of giving gifts is for New Year. This means that everyone regardless of religious believe or practice can celebrate a gift day together. No one feels left out. It actually seems a bit strange that the USA did not adopt this practice as the country in part had a strong idea that religion should be so open that no one religion would have a way to dominate as least by state mandate or treatment. Christians have long talked about how "commercial" their religious holiday has become and to put gift giving back to its original place at New Year would solve that and it would also give everyone an additional week to shop!

Regardless of the day it is celebrated in your country. If you celebrate it we hope it is a great one for you.

We have many picks for the watch list this week. I think we may soon start having a video clip of the most recent picks on the front page each day to give a quick overview of the new ones.

SWIR tried on Friday and failed but on a down day it did very well so this one may do well on a market rally next week.

CDIC has normal volume of only 137K but a pretty nice looking chart. It has 200-day resistance at $1.11 and you see the 1.05 resistance and then at 1.08 so maybe one to nibble on at a couple of levels. The trend line should be support.

STXN closed Friday right at resistance.

SYNM closed at $4 and has a trend line break about $4.30 and then $4.50 some resistance. Super volume last week.

CTLM has been trying a while now at this level and still would try on a good volume move again over  $2.20 with top break at $2.30

GACF an interesting one. It had its huge volume day on Monday then lighter volume the rest of the week but the price then made its biggest gains. This tells us that most who bought under $1 either sold that same day or are still holding and I bet they are still holding and think it is gong higher but this volume spike has been seen a couple of weeks ago as well.

NXXI was pointed out n the chat room it broke the trend line then the horizontal. I personally have no luck with this stock so do not trade it. (If you have been a trader a while you know how most of us have one or two stocks we don't trade) This sock though can be a good one to trade for others so we show it as would try at a pullback to the support line with a stop under the 200-day.

DHBT the buy point may be at the 200-day or just above the line. It may be one worth looking into fundamental wise. This is the company DHB who make the Point Blank Body Armor that has been so widely used in Iraq. The company had reporting problems though an had or has to still restate some past reports. Interest is picking up so if interested then check to see what is going on now as if they settle things the stock may turn around. They are now on the pinks sheets.

WGDF has several levels ahead that may or may not come into play. Our first buy would be on the break over $2.46.

KKD needs to break $10.75 and it would be sweet. Thanks Mezz.

SGMO may be a pullback play as it formed a nice hammer on Friday with increased volume so looking for a break above the recent highs near $6.50. Longshot on the message board also saw this one.

NTMD was a pick not long ago and it ran for a day but it pulled back to the trend and looks to be starting up again. I generally like this kind of action and acquire stock while it holds support as it seems a good chance of breaking higher.

MB pointed out MGIC as it has a familiar breakout pattern at $2.48

IRIS has overhead resistance but a tempting pattern now with the little consolidation at $12.50 and the 200-day. Watch this one for a break.

Again just showing the long term GRSR as it consolidates under the 200-day. I bet next month it will move to the OTC market and that may help bring on more buyers. By Next year I will have a company profile section to profile companies like this that have super longer term growth opportunities. I briefly looked at another solar company ESLR and they have similar sales but that stock trades over $6 with a price to sales at 6. As GRSR finds a manufacturing facility in the USA and starts to be more widely known and its sales increase it may also trade at those levels. Timing though is never known but at least at these prices it seems rather ridiculous levels.

Will not show the chart of NNRF our other long term pink sheet play but they had yet additional very encouraging news this week. Lawrence C. McQuade, formerly Vice Chairman of Prudential Mutual Fund Management and Executive Vice President with W.R. Grace & Co., will join the Company as Chairman of the Board as of January 15, 2007.

He also served as United States Assistant Secretary of Commerce from 1963 through 1969 and at the U.S. Department of Defense, as Assistant to the Assistant Secretary for International Security Affairs, in the administration of John F. Kennedy.

He was quoted, "``I am very pleased to be joining NUCON-RF as Chairman,'' said Mr. McQuade. ``After watching the company's steady evolution and progress since its initial conception, I strongly believe its mission of acquiring companies and technologies designed to create an integrated holding company able to solve leading engineering and environmental challenges in the global markets -- focused on international multilateral projects -- is one that can and will be accomplished in a relatively short space of time."

http://biz.yahoo.com/pz/061221/110851.html

Nucon is doing exactly the necessary things to build the company. There is no other Russian Nuclear power and cleanup play on the US stock market as Russi is greatly increasing its nuclear power plants a company like this will be more in the news.

That is enough picks to start off the short week!

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