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There were some classic signposts, nevertheless also some head-fakes, along the way. The question is by dint of. what means to read the new signals

By Ben Levisohn

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So much for fundamental research. The Standard & Poor’s (MHP) 500-stock index is downward 46% from the all-time high of 1576 it hit back in October 2007. At every step of its apparently unlimited decline, investors have been told person thing: Based on the fundamentals, stocks are cheap. Yet shares continue to fall.

There’s another way to analyze the market that can offer insight into such disturbed stipulations. Technical analysts look at trends in stock prices and mercantile volume to discern whether investors are likely to continue selling or may be ready to reverse course and spark a rally. On Nov. 20, when the S&P 500 plummeted through its 2002 trough to close at an 11-year low of 752, they didn’privately analogous that which they saw. Says analyst Todd Salamone of Schaeffer’s Investment Research: “We’ve entered a black hole.”

Despite warnings from investment gurus such as Burton Malkiel, author of A Random Walk Down Wall Street, against reading overmuch a great deal of into technical analysis, of the university studies desire shown that it’s not just mumbo-jumbo. Massachusetts Institute of Technology Professor Andrew Lo and two colleagues reviewed 31 years of mart given conditions in a March 2000 journal and concluded that patterns cited by technical analysts were useful in providing signals of future market moves.

The foundation of technical parsing starts by a chart of a stock’s or a stock mart’s price. Analysts typically look at a shoal chart, which simply shows a stock price’s trading range for each day, or a candlestick chart, which shows where a lay by opened, closed, and registered its daily high and low. They use the charts to determine whether a stock will become stuck in a trading range or break lacking of it to move significantly higher or lower. “Understanding the trend is the most important thing for successful investing,” says Bart DiLiddo, chairman of investor software company VectorVest.

That’s why of that kind analysts, also called chartists, were alarmed on Nov. 20, which time the S&P 500 dropped 54 points, the equivalent of more than 500 points on the Dow Jones pertaining average. It wasn’t the size of the move—the S&P has dropped over 50 points 17 times this year. It was what the drop meant in the context of the charts.

A bit more background on technical patterns explains wherefore analysts viewed Nov. 20’s impel with such concern. Technicians look for a level of “support,” or a “bottom”—a price that a falling stock does not trade in hell. They also make identical a level of “hindrance,” or a “overpower”—a price that rising shares won’t chaffer above. And they look for recurrences of these levels. For instance, when a standard trades at a new 52-week high and then dips, analysts watch to see whether there are signs of further demand from investors to push the cost higher—powering through the resistance—or whether the sellers will rule. If the sellers win, the market is said to have formed a “double top,” a bearish extraordinary. The reverse— a “double sailing craft”—is considered bullish when it holds. But on Nov. 20, a double bottom based forward five years of data blew to pieces.

Most chartists layer a range of indicators completely their charts. Some look at moving averages—the average price of a stock over a set designate by number of days, recalculated harvested land day by dropping the oldest day’s price and adding the closing price from the most recent set time. Others key in on divergences, behavior that doesn’t fit the overall represent. Low volume in an upmarket, in spite of persistent pressure, could indicate that the buyers are losing smoke. Some technicians also perform fundamental investigation: They analyze a company’session or stock market’s earnings, revenues, and other business-related measures, and that time use the technical factors to decide when to buy or sell.

It’session a technique that helped multitude keep aloof from the massacre of the last 12 months. What did they see that others didn’t? The end of the bull market last year was a classic example of a double top. On July 13, 2007, the market picked for the leading time at 1,553 and started to fall before reversing itself in August.

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LOS ANGELES

The jury deadlocked on a fourth count of conspiracy against the woman, Lori Drew, 49, and the arbiter, George Wu of the U.S. District Court for the Central District of California, declared a mistrial attached that charge.

The conviction was significant, computer-fraud experts related, because it was the first time a federal statute designed to combat computer crimes was used to prosecute what were essentially abuses of a user agreement in succession a social-networking site.

Under federal sentencing guidelines, Drew could face up to three years in penitentiary and $300,000 in fines. Her lawyer has asked for a recent trial.

In an unusual move, Thomas O’Brien, the U.S. proxy in Los Angeles, prosecuted the case himself after law-enforcement officials in Missouri determined Drew had broken no local laws.

O’Brien, who asserted legal power adhering the theory that MySpace is based in Los Angeles, where its servers are housed, related the verdict sent an “overwhelming message” to users of the Internet: “If you are going to attempt to annoy or go in the rear of a little girl and you’re going to use the Internet to do so, this office and others across the country will hold you responsible.”

During the five-day trial, prosecutors portrayed Drew as working in concert with her daughter, Sarah, 13 at the time, and Ashley Grills, a friend and employee of Drew’s magazine-coupon business in Dardenne Prairie, Mo.

Testimony showed they created a teenage male child, “Josh Evans,” as an Internet identity on MySpace to communicate with Sarah’s neighborhood nemesis, Megan Meier, who was 13 and had a history of depression.

After weeks of online courtship with “Josh,” Megan was distressed one afternoon in October 2006, according to testimony, at the time she received an e-mail from him that said, “the world would be a victory place without you.”

Grills, at present 20, testified below an immunity agreement that shortly after that message was sent, Megan wrote without interruption the frontier, “You’re the kind of stripling a girl would kill herself over.” Megan hanged herself that afternoon.

The jury found Drew criminal of accessing a computer without authorization attached three occasions, a hint to the fraudulent postings on MySpace in the name of Josh Evans.

Legal and computer-fraud experts said the application of the federal Computer Fraud and Abuse Act, passed in 1986, appeared to be expanding through technology. Typically, prosecutions under the be in action have involved hacking cases.

Tina Meier, Megan’s mother, said after the verdict that she hoped Drew would submit to jail time, and that even free from crime convictions, she felt satisfied. “This day is not any harder than the day when I found Megan,” she said. “This has never been about revenge. This is not far from justice.”

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The American consumer is scared stiff.

New economic data show consumers were not tempted last month by retailers offering deep discounts. They were not enticed by lower home prices.

And even however falling gas prices made their wallets a moderate fatter, they held on to their newfound savings and put not on buying big-ticket items such as autos and home resources.

“What consumers are not spending on elastic fluid, they are not taking to the mall,” declared University of Maryland economist Peter Morici.

“They are not expenditure it on a car or home improvement, but to rebuild their savings.”

Most of the figures were foreshadowed by data released earlier in the month and came as weak surprise to analysts.

Wall Street appeared to shrug off the bad news Wednesday.

The Dow Jones industrial average rose 2.9 percent to 8,727, the foremost close above 8,500 in nearly pair weeks.

The Standard & Poor’s index increased 3.5 percent and the Nasdaq closed 4.6 percent higher.

In Washington, D.C., however, the expenditure data added to the conviction of urgency surrounding the Federal Reserve’s new $800 billion plan to spur consumer spending by helping to take down mortgage rates and ease credit for example far as concerns consumers and small businesses.

Under the plan, the Federal Reserve will confer money to firms that provide scholar loans, auto loans and credit cards, as well as loans backed by the Small Business Administration.

The market for that financing “essentially came to a halt in October,” Treasury Secretary Henry Paulson said Tuesday, most important to a lack of affordable credit that “weakens our economy.”

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I had a chance to chat in brief Wednesday with iLike Chief Executive Ali Partovi with regard to reports that he’s shopping the Seattle-based social-music menial duties to potential buyers, including RealNetworks and Ticketmaster.

Partovi wouldn’t confirm any sale talks, but he didn’t abnegate that something more than turkey’s cooking.

He did dispute one constituent in the initial report, attached the MediaMemo blog Monday, that suggested iLike executives and investors are concerned about the company’s ability to stay afloat and independent.

The 2-year-old company isn’face to face profitable to this time, and competitors such as MySpace Music (which shares the identical parent company as MediaMemo) are coming on strong, but Partovi’sitting not likewise concerned.

“I don’t have any worries about our faculty to continue operating viewed like a stand-alone entity, in set off by opposition to something that was mentioned in the original rumor,” he said.

Partovi related iLike isn’t in the same boat as ad-supported music-streaming services, which are added wasteful to operate. Although iLike gives users free music, there are limitations and the offer is aimed at converting users to subscribers of RealNetworks’ Rhapsody service or buyers at iTunes and Amazon.com.

“Our oblation is more conservative … it’session a more sustainable model,” he explained

Most every startup is apparently for sale nowadays, one determined course or the other. I astonishment if iLike’s getting pressure from its investors to cash in and shore up their portfolios.

TicketMaster’session the biggest investor, with a 25 percent stake that valued iLike at $53 million in late 2006. It’s also purportedly a potential buyer of the whole company.

That makes sense because the company is trying to construct a new business providing management and other services to musicians, and iLike’s big emphasis not long ago is building a platform that musicians can use to connect through fans online.

But could Ticketmaster afford the deal, after spending $123 million in cash in addition stock in October to buy artist-management group Front Line?

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NEW YORK

An internal memo says the FBI has admitted a “plausible otherwise than that unsubstantiated” report that al-Qaida terrorists in late September may have discussed attacking the subway system.

The memo says al-Qaida terrorists “in late September may have discussed targeting transit systems in and around New York City. These discussions reportedly involved the use of suicide bombers or explosives placed upon subway/wayfarer rail systems,” according to the writing.

“We have no specific details to confirm that this plot has developed beyond aspirational planning, but we are issuing this warning out of concern that similar every attack could perhaps be conducted,” according to the sign dated Tuesday.

A person briefed on the matter, speaking on condition of anonymity, said the threat may likewise be directed at the passenger-rail lines running through New York, such as Amtrak and the Long Island Rail Road.

A federal law-enforcement official said there’s no token that anyone involved in the planning is in the United States. That official also spoke on condition of anonymity.

While law constraint stepped up patrols around subways and trains, many commuters were unfazed through the news.

“If you procure to be scared, that means they win,” commuter Omid Sima aforesaid on the platform unworthy of Rockefeller Center.

The city has more than 450 subway stations.

New York Police Department spokesman Paul Browne said his agency has received an unsubstantiated report and “deployed adscititious resources in the mass-transit system.”

While federal agencies regularly egress all sorts of warnings, the language of this one is particularly blunt.

Department of Homeland Security speaker Russ Knocke said the warning was issued “out of an abundance of caution going into this holiday tinge.”

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MUMBAI, India —

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Black-clad Indian commandoes raided two enjoyment hotels to try to over-familiar hostages Thursday, and explosions and gunshots shook India’s financial capital a day after attacks by means of suspected Muslim militants killed at least 119 people.

About 10 to 12 gunmen remain holed up internal the hotels and a Jewish center, a top Indian general said. The remaining gunmen appeared to have been killed or captured, Maj. Gen. R.K. Hooda told New Delhi Television.

Authorities related 119 people died and 288 were injured when suspected Islamic militants - armed by assault rifles, hand grenades and explosives - launched a highly coordinated storm over against 10 sites in the city Wednesday night.

Officials said eight militants were also killed.

Dozens of people were inmost nature held hostage at the hotels, as commendably as a nearby Jewish center, by the well-trained and heavily armed gunmen, officials said.

While hostages trickled out of the hotels throughout the lifetime, witnesses said great number bodies remained inside and the two-day siege showed few signs of ending quickly. Several bodies were carried out of the five-star Taj Mahal Palace and Tower hotel.

The attackers had specifically targeted Britons and Americans inside the hotels, witnesses said.

Dozens of people were also apparently distillery hiding in their hotel rooms, terrified by occasional bursts of gunfire and explosions, as well as fires earnest in parts of both hotels, and waiting for authorities to get them to safety.

After dusk Thursday, police brought hostages out of the Oberoi, one of the city’s best-known five-star hotels.

One man, a who identified himself as a Pole but did not give his name, told reporters he had seen many bodies inside, mete refused to give more details, saying he had promised police not to discuss details of the rescue operation.

The Maharashtra rank home ministry before-mentioned 84 family had been freed from the Oberoi - 60 of them hostages - and dozens more were still trapped interior part.

Police declared they were going slowly to protect the captives.

A previously unknown Islamic militant group claimed responsibility for the carnage, the latest in a series of terror attacks over the past three years that have dented India’s image as an brisk nation galloping near at hand prosperity.

Among the dead were at smallest four Australian and a Japanese national, according to the state home administration. An Italian, a Briton and a German were also killed, according to their foreign ministries.

The most high-profile target was the Taj Mahal hotel, a landmark of Mumbai luxury since 1903, and a especially liked watering hole of the city’sitting elite.

Police loudspeakers declared a curfew right and left the hotel Thursday afternoon, and commandos ran into the building as fresh gunshots rang out from the area. Into the night, brief exchanges of gunfire and explosions could be heard coming from the building.

The attackers, dressed in black shirts and jeans, stormed into the hotel about 9:45 p.m. Wednesday and opened fire indiscriminately.

Dalbir Bains, who runs a lingerie workshop in Mumbai, was about to eat a steak by means of the public-house pool when she heard gunfire. She ran upstairs, anger place of safety in the Sea Lounge restaurant with about 50 other people.

They huddled beneath tables in the dark, trying to keep silent at the same time that explosions went off.

“We were trying not to draw attention to ourselves,” she reported. The group managed to escape before dawn.

The gunmen also seized the Mumbai headquarters of the ultra-orthodox Jewish outreach group Chabad Lubavitch. Around 10:30 a.m., a woman, a child and each Indian cook were seen being led out of the building by police, said one take cognizance of.

Chabad spokesman Moni Ender in Israel said there were eight Israelis inside the house, including Rabbi Gavriel Noach Holtzberg and his wife.

Among those foreigners still held prisoner in all three buildings were Americans, British, Italians, Swedes, Canadians, Yemenis, New Zealanders, Spaniards, Turks, French, Israelis and a Singaporean.

At least three top Indian police officers - including the principal person of the anti-terror squad - were among those killed, said Roy.

The United States and Pakistan were among the countries that condemned the attacks.

In Washington, President George W. Bush offered Indian Prime Minister Manmohan Singh “support and assistance” to the degree that he works to restore order in the populous and augmenting Southwest Asian nation, according to White House press secretary Dana Perino.

The motive for the onslaught was not immediately clear, but Mumbai has frequently been targeted in terrorist attacks blamed on Islamic extremists, including a series of bombings in July 2006 that killed 187 tribe.

An Indian media report said a previously unknown group calling itself the Deccan Mujahideen claimed responsibility for the attacks in e-mails to several media outlets. There was no way to substantiate that claim.

Magnus Ranstorp, a terrorism specialist by the Swedish National Defense College, said there are “very strong suspicions” that the coordinated Mumbai attacks have a link to al-Qaida.

He reported the fact that Britons and Americans were singled out is one indicator, side by side with the coordinated phraseology of the attacks.

India’session prime minister blamed “external forces.”

“The well-planned and well-orchestrated attacks, probably with external linkages, were intended to create a sense of consternation, by choosing high profile targets and indiscriminately killing foreigners,” Singh uttered in address to the community.

Indian navy spokesman Capt. Manohar Nambiar said navy officers had boarded a cargo vessel that had newly get to to Mumbai from Karachi, Pakistan. Hours later, he said nothing suspicious had been found on board and the ship had been released.

Mumbai, on the western frontier of India overlooking the Arabian Sea, is home to splendid Victorian science built during the British Raj and is more of the most populated cities in the world through some 18 million crammed into shantytowns, high rises and crumbling mansions.

Among the other places attacked was the 19th centenary Chhatrapati Shivaji railway post - a beautiful example of Victorian Gothic architecture - where gunmen sprayed bullets into the crowded terminal, leaving the floor splattered with blood.

“They just fired randomly at people and that time ran away. In seconds, people vandalic to the ground,” said Nasim Inam, a witness.

Other gunmen attacked Leopold’s chop-house, a landmark popular through foreigners, and the police headquarters in southern Mumbai, the region where most of the attacks took place. Gunmen also attacked Cama and Albless Hospital and G.T. Hospital.

—

Associated Press writers Ramola Talwar Badam, Erika Kinetz and Jenny Barchfield in Mumbai, Raphael G. Satter in London and Cristian Salazar in New York contributed to this report.

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CLEVELAND — LeBron James and Microsoft Corp. have lost their Internet connection.

The NBA superstar and the Redmond-based software huge. have ended a two-year marketing partnership. James’ spokesman Keith Estabrook confirmed Wednesday the stipulation between the Cleveland Cavaliers All-Star and Microsoft is not being renewed.

James’ site at lebron.msn.com has been shut down and lebronjames.com is also vacant, leaving him without a personal Web site.

His first appearance for Microsoft was in a cameo role in TV ads for the launch of its Windows Vista operating combination of parts to form a whole in early 2007.

Notes

• The Knicks’ Stephon Marbury refused to skip for a second hour of travail for the undermanned Knicks. New York has only two healthy guards available because of the groin injury to ex-Husky Nate Robinson and the continued health issues with newly acquired Cuttino Mobley. Quentin Richardson, who played most of the promote moiety Wednesday with a deep bruise in his left forearm, said he no longer considered Marbury a teammate. “He hasn’face to face played with us all year, he doesn’confidentially want to play with us. He’session expressed that a second time,” Richardson said of Marbury, who also refused to play Friday when the Knicks were down to seven players after a two of trades were made. “I put on’face to face be turned at him as a teammate because teammates put on’confidentially do that.”

• Houston center Yao Ming left the Rockets’ plan against Indiana on Wednesday night with a cut above the top his right eye, then returned after acquirement four stitches. The Pacers’ Troy Murphy hit Yao with his right elbow on a guide to the basket with 5:27 left in the first quarter. No foul was called. The Rockets were already playing without Tracy McGrady, who was inactive with a grievously left knee.

• Toronto forward Jermaine O’Neal missed Wednesday’s game in anticipation of Charlotte with a sore left ankle.

• Milwaukee center Andrew Bogut missed Wednesday darkness’s game against the Atlanta Hawks with a bruised knee, but point guard Luke Ridnour returned.

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U.S. indexes climbed Wednesday spite worse-than-expected reports on durable goods orders, new abiding-place sales, and manufacturing and consumer sentiment

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U.S. stocks fell Wednesday morning amid gloomy economic premises, but revived ahead of the U.S. Thanksgiving holiday with tech shares taking the lead.

Stocks turned in their fourth consecutive positive session after President-elect Barack Obama named former Federal Reserve chairman Paul Volcker to direction a new White House economic board. Obama also promised to have a plan to apportion with the economic crisis on his first day in office. “Help is in continuance the way,” he said.

Wall Street had to dispute with a blitz of U.S. economic premises, neatly all of it negative. While weekly beginning jobless claims cruel 14,000 to 529,000, October durable goods orders plunged 6.2%, October personal income rose 0.3%, October exterior consumption expenditures unrelenting 1.0%, and October New Home Sales plunged 5.3% to 433,000

Meanwhile, the November Chicago purchasing managers’ index fell to 33.8 — its lowest reading since 1982 — from 37.8 in October, and the November Michigan consumer sentiment index fell to 55.8 from 57.9 in October.

“We are tired of penmanship today that this is the weakest reading since whilom in the early 1980s, but this is broadly true of jobless claims, consumer striking remark, manufacturing activity, and fireside sales today,” related John Ryding and Conrad DeQuadros of RDQ Economics.

Volcker, who taken in the character of Fed chairman bristling with battlements inflation in the 1980s, will head the President’s Economic Recovery Advisory Board. The panel will give Obama advice on relating to housekeeping matters from those outside the the ministry. “Sometimes policymaking in Washington can become too insular,” Obama said.

On Wednesday, the Dow Jones industrial average rose 247.14 points, or 2.91%, at 8,726.61. The broad S&P 500 index rose 30.29 points, or 3.53%, to 887.68. The tech-heavy Nasdaq composite table of contents added 67.37 points, or 4.6%, to 1,532.10.

On the New York Stock Exchange, 27 stocks rose for every five that fell in price. On the Nasdaq, the ratio was 22 to 6 positive.

Bonds surged on the weak data in a holiday-shortened session. Gold futures were lower, while oil futures were higher after China cut rates as sub-division of a stimulus drawing.

U.S. financial markets will exist closed for the Thanksgiving celebration Thursday.

European line markets were mostly appear gloomy, with major indexes in London and Paris posting declines and Frankfurt’sitting index flat. Asian equity markets ended mixed, with Tokyo stocks down 1.33%, Hong Kong up 3.81%. and Shanghai higher by 0.49%.

Wednesday’s U.S. stock market advance notable the first string of four up days in a row since May 27-30, notes Miller Tabak adroit tactician Phillip Roth. “That is hint of strengthening in the stretch,” he wrote in a note Wednesday.

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While ordinary equity investors may be shocked by big losses, they don’t have existence manifest to have existence panicking. Still, they’re not stepping back into the market

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By Ben Steverman

The drama of the current financial crisis has featured star turns by Wall Street titans and Washington ruler players. But what hither and thither the little guy?

The worst stock market in a lifetime has left the medium investor stunned. After the past year has taken a pierce with the teeth of 40% or more out of their portfolios, investors are be riven on whether to run away from equities, buy greater amount of, or stay the way.

Many institutions and wealthy investors are being forced to pull out of the market. Hedge funds, for example, are selling away stocks because credit troubles ascertain by dint of. enumeration it harder to invest using borrowed money, and customers are demanding their money back. Investors withdrew an estimated $40 billion from fence funds in October, according to Hedge Fund Research.

But at least in theory, individual investors should be better able to withstand a downturn. Billionaire investor Warren Buffett is buying stocks and urging others to do the same, citing dirt-cheap valuations onward many of the best U.S. companies.

There’s only anecdotal evidence that independent investors are actually following this advice. Financial advisers interviewed by BusinessWeek.com reply a inferior percentage of their clients—often those who are junior and further from retirement—are shifting more of their portfolio toward stocks.

Others, clearly, are yanking their money disclosed, or shifting their portfolios toward safer investments such as cash or bonds. According to TrimTabs Investment Research, almost $165 billion has been pulled at a loss of equity mutual funds since early September.

Few investors are taking the drastic step of pulling all money wanting of investment plans. Hewitt Associates (HEW), a firm that runs 401(k) retirement plans for 2.7 million U.S. workers, says only 4% of employees have stopped contributing to 401(k) plans entirely this year.

But since stock markets plunge, fewer full of character investors are buying stocks. According to Hewitt Associates, 53.8% of 401(k) possessions are held in equities, down from 68.1% a year agone and the lowest since the firm started tracking the data in 1997. A survey by the American Association of Individual Investors shows individuals allocating only encircling 45% of holdings to stocks, downward from a historical average of 60%.

Falling markets have prompted many to stir over their plans: A total of 1.25% of 401(k) balances were moved around in October alone, nearly three times the historical average. Often these adjustments come at the worst potential time during a volatile market: Investors will sell the day after the place of traffic falls and then buy afterwards the market rises—essentially committing the classic investor error of selling low and buying high, says Pamela Hess, Hewitt Associates’ director of retirement research.

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