As 2008 begins trading tomorrow we will be hit with some news that may impact the markets before they even open.

Tonight it is being reported that a deal to purchase PHH Mortgage company by General Electric (financial division) and Blackstone has been canned. The original deal was worth $1.8 Billion but has been called off this weekend due to the banks financing the deal have pulled back on their willingness to lend the money. So the deal is off and this leaves PHH Mortgage without a buyer. But what is more important here is that this could be taken as a sign of fewer deals going through as money for financing large accusations will not be available.

Financial Times reports tonight that auditors will likely force companies to provide greater evidence that they have sufficient financing for business operations in 2008. The news article goes on to say that the extra pressure by the auditors is a sign that the credit crisis is spreading beyond just the financial sectors. Recall that Lisa and I wrote about this very topic not long ago.

We have added a new list of stocks to watch for swing trades. The list will grow over the coming few days but at the moment these are the ones I processed this weekend. The list will grow substantially over the coming weeks. At the moment there are more short trade setups than long trade setups, I promise that we will keep looking for long trades that look healthy. The market has a lot of damage still, and signs of more down ward movement still prevails. See the ‘Watch List’ page for the new list.

Be on the lookout for fast selling on some of 2007’s biggest momentum stocks. If you have long positions in some of the solar names for example, or other stocks which made significant advances in 2007 beware that January may see a large portion of those gains evaporate. For if the market continues to show signs of weakness then people will be more willing to take what gains they can get off the table.

On tap for this week:

Wednesday

• 10:00 am December ISM Manufacturing Data
• 2:00 pm FOMC minutes of December policy meeting will be released

Thursday

• 8:15 am ADP unemployment report (remember that their accuracy has not been good)
• 8:30 am Initial jobless claims
• 10:00 am December Factory Orders
• 10:30 am Oil inventories

Friday

• 8:30 am December Non Farm Unemployment Data
• 10:00 am ISM non manufacturing data
• 10:30 am Natural gas inventories
• 11:15 am FOMC member Kohn will be speaking in New Orleans