Market Analysis for Jan 14th, 2005

After several hours of trading, once again we notice that the recovery action has failed to inflict any sort of damage to the dominant downtrend. To do so, the E-mini March S&P must hurdle and sustain above 1190.25. Otherwise, all we have is a traverse of a down-slanted trading channel within the unwinding downtrend. Frankly, it is both remarkable, and disconcerting (in a general sense) that the e-SPH has remained so sluggish for the second week of January- after a terrible performance during the first week of the month. Increasingly, this is warning us that the indices likely are headed for-- and "need"-- a washout to the downside prior to the emergence of sustained strength. For now, the bears remain in directional control.

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