For what? A 2 second scalp. No one in their right mind will take any substantial shorts before the big man speaks.
"The equity markets were broken on purpose." I agree. Imo, it began with Greenspan's recession comments a few months ago. I also get the impression there is more than one act to this play besides what you have mentiioned.
The macro economic indicators are now showing signs of extreme weakness. We have been "printing this economy and stock market" for months now. Information leaked Feb. 20th on the 400pt down day. Now the cat is out of the bag. Economy is in severe contraction and even the best "financial engineering" can save it this week. The problems are just to obvious and overwhelming. VIX is in the low/medium 20's and the fact remains that the FED might not lower interest rates. I see this as a distinct possibility. Elliot 5th wave might not be sustainable/recoverable over the long term and August/September are historically the worst months in the market. Expect a drastic sell off between now and Sep the 18th. If Sep the 18th goes by and no rate cut, then we will have a catastrophic breakdown back to the 12,075 level that we where at on 3/15/07. 3/15/07 was the beginning of the trend that took the market to 14,000. Brilliant play by the institutional banks to run up the market from that level with all this subprime/credit/forclosure/mergers and aquisitions ending information lingering. Fundamental breakdown and severe contraction can't be reversed entirely. The damage has already taken root. The only saving grace for the market is the fact that we will enter the holliday season soon and the market generally takes a turn North at the first of Oct. However the earnings on the 3rd quarter will be much more dismal that the horrible losses for many sectors in the 2cd quarter, most likely sending the market down again. Gov. should have taken action 2 yrs ago as this situation could be seen by the logical 2yrs ago. However as usual, the incompentacy of officials strikes again. Going to see a big contraction and credit tightens further. Jobs shrink and foreclosures increase. Market went up on hot air and now the foundation is crumbling. Question is/ When will the market finally reflect this severe contraction? The answer is tommorrow and all next week. 2.2 Trillion dollars in subprime losses alone. Situation has spread into all areas of the economy. My suggestion? Buy puts and/or short the weakest sectors across the board.