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Santa Claus Rally?

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As the S&P 500 quickly approaches August credit crunch lows, a `Santa Claus Rally’ looks unlikely. But what can the charts say about the rest of the year?

Louise Yamada, a leading chart technician, showed a chart of the S&P 500, pointing out how close that index is to breaking its August lows of about 1406, a level she called a “very important break.”

Looking to some individual stocks, Yamada highlighted Cisco (CSCO), calling it a buying opportunity if the stock pulls back “a couple more points.”


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A chart of Broadcom (BRCM), shows it already broke its support levels and looks to be headed down, Yamada said. She would sell BRCM because its chart indicates it hasn’t followed through on its technical progression.

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Coca-Cola’s (KO) chart shows the stock broke a 5-6 year downtrend, according to Yamada, and is now initiating an uptrend move. She called KO a stock to buy into a decline.

And finally, Bed Bath and Beyond (BBBY) shows a ‘sell from top’ formation and should be sold, Yamada said.


While there may be some individual stocks that work for their technical attributes, Yamada sees an “overriding structural deterioration” in the market that suggests any rally will be weak.

Watch the video for Yamada's full technical analysis:





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Trader disclosure: On Nov. 19, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Finerman's Firm Owns S&P 500 Options, Finerman's Firm Owns Russell 2000 Puts, Finerman's Firm Is Short (IWM), Finerman's Firm Is Short (MDY), Finerman's Firm Is Short (SPY), Finerman's Firm Is Short (IJR), Finerman's Firm Is Short (IYR), Finerman's Firm Owns (BIIB) Options, Finerman's Firm And Finerman Own (GS), Finerman's Firm Owns (HD) And (HD) Puts, Finerman Owns (HD), Finerman's Firm Owns (KSS), Finerman's Firm Is Short (LEH) And Owns (LEH) Puts, Finerman's Firm Is Short (LEN), Finerman's Firm Owns (LTD), Finerman's Firm Owns (MSFT) Options, Finerman's Firm Owns (TWX), Finerman's Firm Owns (YHOO), Finerman's Firm Owns (WMT), Finerman's Firm Owns (NDAQ), Finerman's Firm Owns (NYX), Finerman's Firm Owns (NMX) Options, Finerman's Firm Owns (BEAS) Options, Macke Owns (DIS), Macke Owns (YHOO), Najarian Owns (AMTD) Options, Najarian Owns (CSCO) Options, Najarian Owns (YHOO) Options, Najarian Owns (GOOG) Options

Louise Yamada Owns (CSCO), (KO)