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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: sandeep who wrote (80485)	7/14/2008 5:00:44 AM
From: Real Man	Read Replies (1) \| Respond to of 94695

The FNM/FRE bailout was expected by the market. However, not the form of the bailout. The market was betting on nationalization (by narrowing agency spreads to treasuries and dumping FNM/FRE stock), now that's off, so FNM/FRE shorts will get the beating and this will rally the overshorted financial stocks. They took quite a beating in the past month as well. Not much has changed, so... trade carefully. If the rally today fails today or early tomorrow, the bottom for next Monday in high 1100-s for SP (I think I had 1180, not 1160 for end of July bottom posted in June using GZ model) is still on. As GZ says, dis decline is not out of time yet, even though it's out of price. GZ is waiting for a more solid buy signal <G> It all depends on whether the market has a relief from reported financial earnings (quite likely, since the market is expecting Armageddon), or these earnings confirm the worst nightmares. There is no way of knowing that. If in doubt, stay out, or be very disciplined this week, whatever the direction you are playing <G> Needless to say, overnight position holds will be dangerous. Also note that 15 billion is not enough for FNM/FRE, so the market too can sell that after initial rally.