Mid-term events,the pivot.

The upcoming 2010 mid-term elections will be the cause of some mild anxiety. A moderately popular Democratic President currently occupies the White House, although his popularity is not as strong as the day he was sworn in.

President Obama is reconstituting the team that helped him win the White House to counter Republican challenges in the midterm elections and recalibrate after political setbacks.

Obama has asked his former campaign manager, David Plouffe, to oversee House, Senate and governors' races to stave off a hemorrhage of seats in the fall.
The reinforcement of the White House's political operation took on urgency, when a Republican, Scott Brown, won the Massachusetts Senate seat that had been held by Edward Kennedy.
White House aides were caught off guard when it became clear that Democrats were in danger of losing the seat, and by the time alarm bells sounded from the Democratic Senatorial Campaign Committee, it was too late.
The administration is searching for ways to respond to panic among Democrats over the possible demise of his health-care bill and a political landscape being reshaped by a wave of populism.
Plouffe built a reputation in 2008 as a master of the nuts and bolts of campaigns and will assemble a team to provide unfiltered political information that serves as an early-warning system.
Republicans are giddy over President Barrack Obama´s handling of the economy and believe his economic recovery plan to be a failure. The country is now concerned whether President Obama´s economic plan - massive federal spending - will work in these economic times.
The Presidential Election cycle.
The four-year election cycle has an important impact on the stock market.
For example, the pre-election year (year three) has not
been down since 1931 (using the S&P 500 total return index), reflecting the actions of the political class to create a positive economic environment during the election year. The returns during the pre-election year are much higher.
The mid-term year contains two quarters – Q2 and Q3 – which are routinely down. Many of the biggest bear markets historically have concluded in year two in the second or third quarters.
The bear market of 2000-02, for example, concluded in October of 2002 – the mid-term year of the election cycle.Trading days 9-12 begin to exert a strong upward influence on stock prices based upon (in theory) the rising use of IRA accounts and 401K plans, both of which allow bi-monthly contributions.
In conclusion,the month of January'10 is the first bearish month.We'll have another two more bearish month play before all system go again.

The Dow on Friday is 15 days to index/options expiry.

Chinese New Year of the Tiger:14/02/10.

Nikkei futures expiry:12/02/10.

9:30am:-- Advance fourth quarter GDP reading boosted the open gap-up

10:30am:--Session high with a shooting star.Spinning top.

11:30am:--Pullback time,failure to upheld at the normal MAV at this hour.Opening gap fully filled.

12:30am:--Technical rebound at bear pivot.Inverted hammer seen.

1:30pm:--Another hourly rebound failed the MAV resistance test.Bearish harami.

2:30pm:--Hangman at session low.

3:30pm:--Day's low established.Bullish harami.

4:00pm:--Hit the bear pivot and pullback.A Friday phenomenon.

Investors have frequently acted in a sell-the-news manner this earnings season, another flood of better-than-expected earnings results has also helped from a sentiment standpoint. So the current situation is Bad news is good news.Consumer sentiment survey for January showed a slight improvement.Strength in the dollar index this session led to modestly lower commodity prices.The market seems to be finding a new low at each progression.

A traditional year end curbs.

The chinese currency,renminbi(yuan) with a portrait of Chairman Mao Tze Tung


The latest China bank lending curbs ripple through economy as well as financial markets throughout the world.
Some bankers report that they are recalling loans, while others are turning down new requests from borrowers following firm instructions from the People's Bank of China and the China Banking Regulatory Commission.
The crackdown which starts in this very last month of the chinese lunar year of the "ox",must be the chinese style of year end financial closing and unwinding stocks position,so next time watchout for this communist style of book closing.We are going to usher the year of the "drunken tigers"in another three weeks time.
Banks in China typically lend at a cracking pace in the first quarter, partly so they have more assets that will yield income throughout the year and partly because they never know when the next administrative clampdown on credit might come.
As well as discouraging property lending, regulators are taking particular aim at industries that guzzle energy and belch pollution.
The Dow,,Wednesday 27/01/10 is 17market days to idnex futures expiry.
The Chinese New Year falls on 14/02/10(Year of the lame Asian tiger)

9:30am:--Bearish 50 points gap down.
10:30am:--After filling opening gap,a big pullback to session low.
11:30am:--Retracement to bear pivot resistance failed.
12:30noon:--Weak morning session holding below bear pivot.
1:30pm:--A bullish engulfing sign.
2:30pm:--Bear resistance breakout.
3:30pm:--MAV resistance breakout.
4:00pm:--Inverted bull.

Th super tri-stars dojis are awaiting the Federal Open Market Committee (FOMC) statement and a State of the Union address from President Obama .
The first FOMC policy statement of the new year came on the eve of a vote to put Ben Bernanke back into the seat of Fed Chairman. To little surprise the statement indicated that economic activity continues to strengthen and that the deterioration in the labor market is abating. The FOMC also opted to keep the federal funds rate at 0.00% to 0.25% and will maintain exceptionally low levels for an extended period of time.