Dow: Brace for Impact

The immortal words of Captain Chelsea "Sully" Sullenberger, just moments before landing his commuter-filled airplane in what is known as "the Miracle on the Hudson", now seems appropriate. As of this writing there has been no progress on avoiding the so-called "fiscal cliff." Many economists predict this will trigger another recession.

The Dow Jones Industrial Average appears to be in the final stages of forming a "Head and Shoulders Top." This is a bearish formation that indicates the index will move lower. The approximate distance between the "head" and the "right shoulder" indicates how far the Dow will correct. It appears we will see a regression to the 200-day moving average line which is about 12,000. From there it is anyone's guess. The next support level is around Dow 10,500. Historically, the market has not crashed in January but we have seen some significant moves downward during that month. This could create some tremendous buying opportunities over the next few weeks.

Note: The above is for information purposes only. Any decision to buy, sell, or hold any specific investment should be reviewed with your own personal portfolio manager.

Merry Christmas and Happy New Year

"But you, O Bethlehem Ephrathah, are only a small village among all the people of Judah. Yet a ruler of Israel will come from you, one whose origins are from eternity past." -Micah 5:2

The above verse was written about 700 BC by the prophet Micah. It predicts the coming of the long awaited Messiah for the Jewish people and the world. Jesus was born in Bethlehem among poor people, from the lineage of King David. He grew up and later established a three year ministry around the Galilee region of the Mediterranean. His life on earth, death, and resurrection fulfilled about 400 Old Testament prophecies which were made over the centuries about Him. The mathematical odds of someone doing all these things are too great to even figure-- in fact, mathematically impossible to fulfill for someone who was not the Messiah. Yes, we can debate whether Jesus was actually born on December 25th, and when the Magi actually arrived, but the historical fact remains. The evidence of His Lordship is indisputable.

If you have never accepted Jesus as the Savior of this world, please take a moment now to ask Him into your heart. No matter what you have done, He will accept you into His family as His child! And you may then enjoy the full inheritance which Jesus, the Messiah brings!

Merry Christmas and Happy New Year!


This article was reprinted from December 26, 2009.

Fiscal Cliff Looms

The market traded sideways this week as everyone listened to the ongoing reports from Washington concerning our budget negotiations. A "fiscal cliff" is looming if the two sides cannot reach an agreement. This term "fiscal cliff" was coined in reference to automatic cuts that will take place if a new budget plan cannot be agreed upon. Economists expect these cuts will send the US economy into another recession.

The Dow continues to show intermediate support with no news coming out of Washington. At this point we can expect a good rally if any favorable news is reported. The market seems to have discounted the fact that the two sides cannot agree on anything. Each side is actively pushing its own agenda.

Speaking on behalf of the President, White House Treasury Secretary Timothy Geithner announced that the White House is prepared to "go over the cliff" if tax rates on the wealthiest individuals were not increased. Speaker Boehner simply stated there was no progress on talks. Boehner and the Republicans are pushing for spending cuts and no tax increases. Public opinion polls show that Americans are likely to blame the Republicans if no compromised is reached.

President Barack Obama and Congressional Speaker John Boehner represent each side of the ongoing negotiations.

Both sides need to be put in timeout

Just as the family that spends more than it makes, feels the pain when the electric company turns the power off, so the government may have to feel the pain of the automatic cuts before they are willing to make any serious progress.