Remember the prestigious Waterford Crystal that was sought after by collectors and connoisseurs alike? Today the company that has roots dating back as far back as 1783 announced it filed for ‘administration’ (the British term for bankruptcy).

From the Scotland Herald:

AROUND 2700 jobs are under threat at Waterford Wedgwood after the historic crystal and china maker became the latest big-name casualty of the economic turndown.

The luxury goods firm – best known for Wedgwood pottery, Royal Doulton and Waterford crystal – yesterday appointed Deloitte as administrators at its UK arm.

Receivers have also been brought in to parts of its Irish business. Waterford, which can trace its origins back 250 years, collapsed after talks over a potential sale to a US private equity firm failed and lenders walked away from the deal.[...]

Reports of December auto sales released today were some of the worst on record, Senate majority leader Reid says the stimulus package may go as high as $1.3 Trillion, and U.S. firms are lining up to become ‘bank holding companies’. Yep, the economy is just fine… (sarcasm)

CHRYSLER FINANCIAL MAY SEEK TO MAKE CHANGES TO ITS STATUS SO THAT IT CAN ACCESS THE TARP – Financial Times
- The unit is currently in talks with the US government.

—–

Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets, a former Bank of England policymaker has warned.

The long-held assumption that US assets – particularly government bonds – are a safe haven will soon be overturned as investors lose their patience with the world’s biggest economy, according to Willem Buiter.

Professor Buiter, a former Monetary Policy Committee member who is now at the London School of Economics, said this increasing disenchantment would result in an exodus of foreign cash from the US.

[...He said that the dollar had been kept elevated in recent years by what some called "dark matter" or "American alpha" - an assumption that the US could earn more on its overseas investments than foreign investors could make on their American assets. However, this notion had been gradually dismantled in recent years, before being dealt a fatal blow by the current financial crisis, he said.[...]

Full article

—–

On to the charts…

DJIA Hourly Chart

The Dow Industrial Average pulled back from the resistance level I highlighted last night in my Dow Industrial technical analysis. This does not mean that we are headed back to the November  lows (not right now anyway). It just tells us that for now the market is still trying to decide what to do. What some in the financial media call a ‘bottoming process’ I call ‘outright fear’ by large money movers to make a decision.

The major indices are over bought on the daily charts and over sold on the monthly charts. It this reason why the market may still make a gallant effort to establish a ‘bear market rally’ in the coming days. I believe that if the markets do rally we will see it on subdued volume levels and then an onslaught of shorting near technical resistance levels.

Those who believe the recession the United States is now in will be short and shallow will be very surprised

S&P 500 Futures Daily

when it worsens in the coming months. This creates the psychological reasoning for a potential bear market rally. The non believers (of a deep and long recession) will attempt to get in on ‘bargains’ (perceived I should add) and drive prices upward. And then as economic conditions deteriorate further in the months ahead they get holding the bag as equity prices begin to drop once again. Then as the naysayers begin to unload to stem their losses it adds to the selling pressure and takes the major indices even lower.

S&P 500 Futures Hourly

The S&P 500 really went no where today. There is support at 920 and a resistance trend (blue line) just above.

On the hourly chart it is becoming very clear that the S&P 500 is forming a rather clean technical channel. And the upper limits of this channel will bring the S&P 500 right to the 1,000 point (daily chart) which happens to be a significant price resistance level. Should there be a bear market rally that takes the S&P 500 upwards to 1,000 expect to see a rather large selling event to take place then. It will also be a point at which I will be shorting the major indices. With the S&P 500 essentially in the middle of the channel right now (and caught between support and resistance) it is difficult to gauge the very near term moves.

Other charts tonight are the TLT, DUG, TLT vs TBT, and Crude Oil.

TLT

TLT vs. TBT

Crude Oil

DUG