Saut: The Maginot Line

Jeff Saut, the respectful strategist at Raymond James has posted his weekly missive, see the latest version here: http://www.raymondjames.com/inv_strat.htm. Last week he suggested this.

His call for this week:

Consistent with last Monday’s strategy report, the Maginot Line at 851 (SPX) was broken to the downside last week, leaving us again in cautious mode. While the DJIA was down 3.7% for the week, the real casualty was the D-J Transports with a stunning 9% loss, leaving them only 158 points above their November 20, 2008 closing low of 2988.99. The action of the Transports was especially disturbing in light of the 10.6% weekly decline in crude oil prices. However, if the Transports violate their November lows, without a similar breakdown by the DJIA of its November closing low of 7552.28; it would be a downside non-confirmation that should be interrupted bullishly. In the interim, we are cautious.

Watch Dow Jones Transportation Average index here, as the index made a new bear market closing low yesterday, but has been lower on 20th and 21st November 2008 ... And here is the Dow Jones Industrial Average (DJIA)!

UPDATE 17:10 (15:10 GMT): watch 815-820 area for S&P500, resitance now ... next level Maginot line (850-855 area) ... Cautious. "Bounce" led by crushed Financials, followed by Tech (IBM, Ericsson reported) ...

Intraday US equities charts here!