Last Thursday's impressive rally fizzled in the following days. I can't see how appointing Geithner all of sudden fixes:
1] record unemployment level 2] record foreclosures 3] record company bankruptcies 4] falling real-estate 5] frozen credit market 6] With fed rate at 1%, we're running out room to cut much more 7] Europe today reported their economy is contracting quicker than forecasted. 8] GS forecasted worse economic numbers for 2009 US gov. today.
MMs are creating some room to take it down further in upcoming days. Usually I like to close out all my positions by day's end, but today I bought some put options at the close. Dow at 8048 have some room to fall.
I called this for one reason only. Was getting too predictable every single day. Up early, big selloff at the end. Had to mix it up a bit is all or else it would be too easy. Otherwise, I am with you Zen. This appointment does nothing substantively to cure the ills. Should be back to business as usual (down) soon.
I knew the big bounce was going to happen one of these days as they have done after in recent past after dropping big for few day.
It just surprised me that it would come on Friday because I tend to think investors don't want to get into new positions just before the weekend.
However, today being the option expiration day, I think there is some financial benefit possibly for MMs to rally to expire heavily outweighted put options and pay out less money on the call option side. Don't know this for a fact, but certainly it would save them some money.
Eight of the ten biggest gain days were during the 89% bear market of 1929-1932. So we should expect some days like this. It may be the 'bottom', but it is more likely a bear market rally. The week of Thanksgiving can be another bounce. But watch out for the week after.