Hi, S&P500 is closer and closer to important 800 point level. And it is not able to make bigger bounce. Every bounce is smaller and smaller. It signalize that there is huge change for breakdown to much lower levels. 630 is one I already mentioned.

I think it is in correspondence with my analysis . They expect that there will be nothing like recovery in second half of 2009. The best what we will be able to see is stabilization of situation on very low levels of economic activity.

And  this is for US. In Europe I expect that recession will be in full progress. And without any visibility for soon end.

This part of economy cycle will be much worse in Europe. And also recovery will take much more time. Why ? One simple reason is that it is not very good to stay in recession with overvalued currency like EUR is now !

And I also do not expect that stimulus packages will be able to slow down this downturn or stop it completely. Economic cycle is not possible to stop. The cycle should go (and it will go)  its own way. 

The only thing one can do is to prepare for new rebound. Nothing else. So the most important is to be flexible, to be ale to stay in business during bad times and have its own edge. Do not build its  business model on availability of easy money from credit lines.

So if you are looking for winners, look for such companies. Who is strong and does not rely on easy money. Who is able to produce and sell also in bad times.

Happy trading, 

Richard

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