what time frame are we talking? If you're talking minute by minute, look for a battle as glass half full guys come in. If you're talking weeks, there is no confidence, and who trusts the administration or system? Didn't Bill Gross buy buy buy, get underwater, and then have a hissy fit? And we're going to outguess him? He can be correct by committing assets in a self fullfilling mode. His buying can propel us. Listen to what I'm about to tell you. In Washington, everyone is wide awake. Wall St. entities are digging in their heels and have no where to go. But the SEC, the politicians, they all see it our way. Tremendous transgressions have taken place, and they are in no mood in DC to side with the money men. You have to factor that in. These assholes have backed Wall St. because they've had their pockets padded, and now, their priveledged lives are threatened. They will not take that lying down, and the finger pointing is going to start. That will NOT instill any confidence in financials , or the system. This will be a week of historic events. The system has been driven to the brink of insolvency; now, we watch the power brokers scramble trying to limit the damage. The GOOD news is, they will be on the hedge funds, so they can't come in and make it worse. The people here who trade need to be nimble, informed, and risk adverse. There will be plenty of money to made, plenty to be lost. This is going to finally be about talent. BTW, there are plenty of "Bear Trap" advanced copies out there. Everybody who has it is sworn to secrecy. But I'm telling you to order an advance copy - from Overstock. LOL. I think it'll be must reading, and it will reinforce many of the threads I've started here for three years. It's all one big ball of wax, and the money men are scared shitless. Believe it. they have no where to go. It's time to step up, and make your voice heard. They are pissing in our sandbox. Reply to fake blogs, challenge reporters, write your legislators. You guys know more than 99.9 % of the population (if that's not scary....) Patrick Byrne told me once, his Dad (Jack was the head of Geico and Fireman's Fund), and he was testifying before some Congressional committee. At the end of his remarks, one of our precious elected representatives leaned forward to his mike and said, "so your telling us, if interest rates go up, bonds go down?" Boys, we're on our own. (Ladies too!)
Don't think this rally can last more than a day Reckon smart money will sell into this rally, who is going to buy a bunch of Fannie and Freddie shares now that they are going to be placed into conservatorship which eventually going to end up like Northern Rock Also,the two companies had nearly $36 billion in preferred shares outstanding as of June 30, according to filings with the Securities and Exchange Commission. The Treasury Department said it will immediately be issued $1 billion in senior preferred stock, paying 10 percent interest, from each company, but eventually could be required to put up as much as $100 billion for each over time if the funds are needed to keep the companies afloat as losses mount. As if investment banks going to buy into these newly issued preferred stocks, if its a real BUYOUT why would the fed be issuing bunch of new stocks Overall I see big trouble ahead for the market now shorts are squeezed and we can go down a lot further.
I'm watching the futures trading and the bonds are already rallying back, though still down a ton. This bailout may (or may not) solve the "financial" crisis, but I don't see how this will stop housing prices from declining, the rise in unemployment we've seen, and the higher taxes that will come regardless who wins the election (when the Bush tax cuts expire).
Short-term, the bailout puts a floor under the market. Long-term, this is a major step toward national bankrupcy.
Futures are certainly up on the news as I expected - as of this writing: YM: +217 (1.95%) ES: +28.75 (2.34%) NQ: +33.75 (1.9%) ER2: +14.70 (2.05%) All have faded a bit from when the markets reopened.
Anybody understand why both the dollar and gold are up??? I've been listening to CNBC World and the consensus is that the dollar will continue to rise and this action puts a floor in the housing crisis because of the additional liquidity that Freddie/Fannie will have access to. Mortgage rates are predicted to fall and lending/refinancing become more friendly. ⦠but isnât the Fed basically assuming 13 trillion in risk/liabilities with its balance sheet? How can that be good for the dollar???
But now back to the high of the session. Yet, Treasuries didn't fall as stock indexes hit highs. I like watching the correlation (or divergence of it).