Nov 27, 2009 (SmarTrend via COMTEX) ----Fears about a "double dip" recession abated Wednesday on reports of stabilization in labor and housing markets and the market indices climbed. The DJIA rose 31 points to close at 10,464, not enough to push the DJIA up to its ceiling of resistance at 10,600. The chances of that happening in today's truncated session appear zero to none as stocks are expected to plummet to test support levels, DJIA 10,200 and S&P500 1,080 due to $60 billion in debt repayment difficulties in Dubai which surfaced yesterday.

No economy is an island is about to be demonstrated this morning. The scope of the real estate market decline in Dubai with a threat to the ability to pay off $60 billion in debt, which was incurred to fuel the breakneck growth in construction, is being viewed as a harbinger of other as yet to surface problems in the commercial real estate markets worldwide. In fact the problem in Dubai is not as large as the fears it will fuel. These fears may be big enough to curtail for several days any rally in the stock markets. A likely multi-day rally was emerging on Wednesday as the daily SmarTrend(R) uptrends to downtrends registered a biased to the upside 41:10, pushing up the Trend Ratio slightly but the IBDI fell an equal amount. These mixed results signaled the intermediate-term uptrend had paused, although it had been expected to resume its climb after the Thanksgiving holiday. If the DJIA falls 200+ points in today's trading as anticipated, it will take until next week to determine if the Dubai fueled fears are a catalyst to reverse the favorable environment for long stocks or are only a pothole in the road north, a reaction that could take the DJIA down by more than 3% percent before buying force can resume its dominance over selling pressure.

The trading environment is unlikely to present favorable conditions for buying stocks before next week, even if today's drubbing is viewed as an overreaction that causes stock prices to drop to oversold levels thereby appearing to be good buys. Three out of four near-term trend indicators had been rising on Wednesday, beginning to show signs that a near-term uptrend would resume today or next week. Previously it had been noted here that the near-term trend indicators were attempting to build bases in their neutral zones from which to rally. Today will likely bring a collapse of that plateau building process and cause the near-term trend indicators to head south and not stop until they become oversold. This process has the potential to take the DJIA down to 10,000 and the S&P500 down to 1,060 before the next leg of a rally can resume.

The impact of the Dubai problems are being felt in fundamental ways worldwide. The price of oil plummeted and the dollar climbed yesterday. These two factors are bad news for the stock indices. The concerns raised by the Dubai debt issues can further chill already cool lending sentiments at banks, bringing down financial stock prices and adversely impacting consumer buying for the holiday season starting today. It is easy to see how the ripple effect of debt repayment problems half a world away can cause the trade-term trend to nosedive; it is not so easy to see what might reverse such a slide even as economist begin to point out that the mini real estate bubble in Dubai is not of such importance nor surprise when considered rationally. In a word, the sales of flat screen TV's, stimulated by falling prices for such, are not expected to be enough to catalyze a consumer buying boom to offset the concerns Dubai has raised. The potential impacts of all these issues and more are discussed below. To view the list of stocks changing trends in the last week and/or hear a podcast of this report, please click on http://www.mysmartrend.com.

Dubai World announced it is seeking a "standstill" agreement from creditors, in what both S&P and Moody's deemed they might consider an official default as they lowered ratings. Investors reacted swiftly and dramatically as risk aversion set in. The US dollar traded higher against most currencies this morning. Japanese officials warned of an imminent intervention to check the yen's steep gains. Oil prices slipped under the $75 level as profit-taking set in, a mindset that even sent gold prices lower from record highs.

Thanksgiving shuttered US trading markets following a relatively strong day of economic posts. The Vix, fear factor index, had dropped to 20.5, after hitting a 15-month low of 20.05. Volume was a light 795 million shares, an expected lull before the holiday weekend. The DJIA rose 0.3% to 10,464.40. The S&P500 increased 0.5% to finish at 1,110.63, a 0.5% rise. The NASDAQ closed up 0.3% at 2,176.05.

Encouraging data indicated stabilizing in labor and housing, both areas hardest hit by the recession. Weekly filings unexpectedly dropped under 500K to 466K last week, down from 501K prior. And new home sales jumped to 430K from 405K prior topping consensus estimates of 404K. Consumer data also proved promising as Michigan's final sentiment index for November rose to a higher-than-expected 67.4, ahead of the 65.0 anticipated. Personal income and spending also bested estimates, up 0.2% and 0.7%, respectively, in October. Weakness in the October durable orders reports, however, proved discouraging as orders fell 0.6% versus the 2.0% surge in September. Durables excluding transports, often viewed as a proxy for business spending, fell 1.3%; economists had anticipated a 0.5% gain.

Today's premarket futures suggest sharply lower equity markets as investors try to assess the implications of the report from Dubai before additional information promised for next week. Both the Nikkei and Kospi sank to 4-month lows, off 3.2% and 4.7%, respectively. The Shanghai Composite fell 2.4% and the Hang Seng plummeted 4.8%. Meanwhile, European exchanges climb up from session lows as panic mode lightened somewhat. The cost of insuring against defaults in emerging markets soared, driving investors into traditional, safe haven plays. At home, yields on government bonds fell, as premarket futures showed the DJIA looking to open off over 200 points.

With the Muslim holiday further clouding the implications of the Dubai situation, traders are likely to remain a nervous lot in a day already likely to prove more volatile than most in front of a 1:00 ET holiday closing. Black Friday and Cyber Monday are viewed as key harbingers of retail sales during the holiday; however, investors are hopeful that the reduced inventory levels will enable retail companies to maintain profit margins at levels sharply above last year's when drastic price cuts were needed to reduce swollen inventories.

In the corporate corner, AIG (NYSE:AIG) announced settlement of claims against former Chairman Greenberg and Chief Financial Officer Smith.

Frontline (NYSE:FRO) reported a Q3 loss of $0.07 per share, beating consensus estimates for a loss of $0.13 per share. Revenues in the quarter sank 60% to $233 million, but came in ahead of consensus estimates of $196 million.

China-based Lenovo Group Ltd. (OTC:LNVGY) announced Friday that it plans to acquire Lenovo Mobile Communication Technology Ltd. from a consortium of investors headed by the private equity arm of Legend Holdings for USD$200 million in cash and shares, according to a WSJ report.

ING Groep (NYSE:ING) priced a rights issue in an effort to raise USD$11.5 billion and reduce its dependence on state support.

Dyax Corp. (NASDAQ:DYAX) announced it established an exclusive distribution agreement with AmerisourceBergen Corp. (NYSE:ABC) for its experimental drug Kalbitor.

By Chip Brian, Editor-in-Chief, Comtex news Network

www.Comtex.com -- editor@mysmartrend.com

The following equities mentioned above include:

   Comtex SmarTrend Alert
   ----------------------------------------------
   Ticker    Last Close    Trend Direction    Trend Price      Trend Date
   ----------------------------------------------------------------------
   AIG        34.68         Downtrend           35.12          10/27/2009
   FRO        26.99         Uptrend             25.55          11/12/2009
   ING        12.28         Downtrend           14.81          10/26/2009
   DYAX       4.03          Uptrend             3.88           11/17/2009
   ABC        24.98         Uptrend             16.18          3/25/2009
   

INX -- S&P 500: 1,111
   Lo: 1,105 Hi: 1,111
   Change: +4.98
   

http://www.mysmartrend.com/images/INX20091127.jpg

INDU -- DOW JONES: 10,464
   Lo: 10,421 Hi: 10,481
   Change: +30.69
   

http://www.mysmartrend.com/images/INDU20091127.jpg

QQQQ -- NASDAQ: 2,176
   Lo: 2,170 Hi: 2,179
   Change: +6.87
   

http://www.mysmartrend.com/images/QQQQ20091127.jpg

This report is divided into three sections. The first deals with our 5 proprietary market indicators, the second section examines important economic and business happenings which are expected to affect U.S. Stock market movements and the third section describes specific company announcement and earnings releases. Experience demonstrates that when these 5 indicators reach extremes they can shortly be expected to change direction and move in the opposite direction. When such happens in all or most of the 5 indicators, on or about the same time, followed by a move from below an extreme (oversold) to above that extreme (or vice versa for overbought), a change in market direction is very probable. The near term market moves are measured to identify the best possible returns for traders/investors. Daily price/volume examinations provide the best data upon which to base such forecasts. In this report though, intraday indicators are examined to improve the point of entry timing for the expected move.

Comtex News Network, Inc. is not a registered investment advisor and does not provide investment advice. Investors bear complete responsibility for their own investment research and decisions and should seek the advice of a qualified investment professional prior to making investment decisions. SmarTrend is a registered trademark of Comtex News Network, Inc. Copyright, Comtex News Network, Inc. 2008

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Copyright, Comtex News Network, Inc. 2008
   
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   As of Monday, 11-23-2009 23:59, the latest Comtex SmarTrend� Alert, 
   an automated pattern recognition system, indicated an UPTREND on 
   03-25-2009 for ABC @ $16.18.
   
   As of Monday, 11-23-2009 23:59, the latest Comtex SmarTrend Alert, 
   an automated pattern recognition system, indicated a DOWNTREND on 
   10-27-2009 for AIG @ $35.12.
   
   As of Monday, 11-23-2009 23:59, the latest Comtex SmarTrend Alert, 
   an automated pattern recognition system, indicated an UPTREND on 
   11-17-2009 for DYAX @ $3.88.
   
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