Blog Post On: 5/31/2010
This week Decision Economics (DE) increased the chance of a double dip recession to 25% from 20% mainly due to U.S. export exposure to the Eurozone. DE goes on to say there may be up to a 20% correction to equities with the S&P reaching the 975-1030 level. (SP 500 closed at 1089 on 5/28).
One factor that is a cause for wonder for a damper on the economy is a policy toward off shore drilling. If BP continues to have issues taking care of the terrible oil spill and we see off shore drilling policies change oil will surely rally and put a damper on the economy.
Reviewing the MTR-TM and the major indexes the markets are in a down trend indicated by lower lows and lower highs. Until the downtrend line is broken the technical signals lead to further downside movement. Caution is key for any long buying at this point.
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MTR-I: Week over week (wow) +1.56 but this is from a sharp move up and not a trend change.
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RSI: 43.79, below 50 is negative for the market. If we see RSI starting to trend back up toward and breaks 50 there will be less risk to buying long.
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MACD: -48.77, below zero is a negative for the markets.
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Volume: On up days the volume has been light. Friday with the market closing down the volume was moderate but a day before a holiday weekend it could expected.
All major indexes are in a downtrend with a recent bounce off of support levels.
The Advance/Decline Lines are all showing support of the downtrend and are not signaling an up move yet. 
From a longer term standpoint the MTR-EM shows that year over year (YoY) employment and real-wages are rising. This reversed a very negative trend and shines a brighter light for the economy in the next 3 to 6 months. This may be in part to temporary census workers. We will keep an eye on this trend for any changes to this trend in the next couple of months.
