Beware the Ides of March

by Larry Levin


February's market went out like a lion, but I doubt it will come in this month like a lamb. The trend is still down and economic data is bearish. Unless Friday's employment report shows strong hiring gains, investors will need to "Beware the Ides of March" indeed.

"Since early October, the market has been largely declining, signaling one of two things," said Hugh Johnson, chairman of Johnson Illington Advisors. "Either we're in a bear market and entering recession or we're having a correction accompanied by a slowdown."

"Either way, the trend as we start March is not good," he said. Not good for long-only investors he meant. For those of us who follow the trend, a protracted move down is happily embraced with just as much vigor as a bull rally.

After the Friday's bug sell-off, the Dow was left down 0.9% for the week, 3% for February, and have now lost 7.5% year-to-date. The S&P 500 lost 1.7% for the week, 3.5% for the month and is down 9.4% year-to-date. The technology-laden Nasdaq fell 1.4% over the past week, is down 5% for February and off a whopping 14% for the year so far.

The numbers above, however, do not include inflation; they're not "real" returns. At the rate of current price increases, government inflation figures may be running at an annual rate of 6%. I think it could be higher, but we'll run with 6% for now. That makes current "real returns" of the Dow -13.5%, the S&P -15.4%, and Nasdaq -19.0%.

Even if the markets were to trade sideways for the rest of the year, the results are quite bad for long-only investors. The market needs good data, and soon if there is any hope for a reversal.

Real Time Trading Signals*for

Trade Date: 2/29/07

E-Mini S&P Trades*
(before fees and commissions):



1) FT sell @ 8:55am at 1349.50 = +1.50 (1 lot)

2) FT sell @ 9:25am at 1345.50 = +3.25 (1 lot)

3) OTF sell @ 10:15am at 1345.00 = +1.00 & +1.50

4) OTF buy @ 11:00am at 1343.50 = b/e (1 lot)

5) Engf sell @ 2:00pm at 1335.00 = +1.25 & +2.00

6) Momo sell @ 2:25pm at 1334.75 = -1.75 (1 lot )...+8.75 points

E-Mini Russell Trades*
(before fees and commissions):


1) Sell @ 10:09am at 693.7 = b/e (1 lot)

2) Buy @ 10:36am at 693.1 = +.5 (1 lot)

3) Buy @ 10:58am at 693.0 = +1.3 (1 lot)

4) Buy @ 11:30am at 694.9 = -.2 & -.7

5) Buy @ 11:38am at 693.6 = -.6 (1 lot)

6) Buy @ 12:08pm at 694.2 = +1.0 & +1.0...+$230.00


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