Tomorrow is indeed St. Crispin's Day. It is indeed Saint Crispin's Day. To the ending of the world. "All things be ready if our minds be so".
I believe today is the day they auction off the Lehman CDS. I think this is what the market is waiting for. I think the pro's have sold the news in advance and as long as the results aren't terrible we should see a move up.
US TECHS: S&P Outlook; Always Darkest before the Dawn Friday, October 10, 2008 9:27:00 AM Boston, October 10. There is some very good news out there - the end of the world can only happen once. There are some big events on today's docket - first the Lehman bond settlement at 10:30am EST which will determine the value of the bonds and thus the payout on CDS. There are concerns that the recovery rate will be below current market value thus the payout for sellers of protection will be higher than anticipated. Also we do not know the level of exposure of CDS contracts sold on Lehman and those who sold protection will have to raise money to fulfill the payments adding extra pressure on the market. Then there will be G7 meetings followed by G20 which have rumors swirling of global guarantees such as the inter-bank lending market. Our title implies that we are on the verge of a major rally as all confidence has been lost. Open interest is at record levels for this time in the cycle (no rolling for two months) and we are sure it is not longs - it is shorts (hedgers but more hedge fund specs that will buy an island for themselves with the profits after bringing the world down). We expect major selling this morning followed by short covering into the weekend's official G7/G20 meetings. Many expect a test of SPZ's 767 (2002 low) imminently - the good news is that is only a stroll in the park away (about 10%) - and we'll eat our hat if we don't have a major bounce from there. Duncan.Balsbaugh@Thomsonreuters.com