The market was in a very hopeful mood today, with both a stimulus bill and a bank bailout plan likely to be announced on Monday. Traders were eager to jump in front of the news; people are expecting innovation.
The latest talk about the bank plan involves a number of things which are slowly being leaked. Such ideas as more transparency and an increased role for Fannie Mae and Freddie Mac are not going to cause wild celebration, especially since we already are looking for them.
Whatever we end up with, you can be sure that the idea of selling and/or shorting the news is going to be on the minds of many. Maybe the bears will just turn into short-squeeze fuel, but the history of sustained rallies on government action has not been positive during this bear market.
The market is totally news-driven right now, so there be some major whipsaws. It is really just a function of trying to gauge psychology more than anything. So you can forget about fundamentals and charts for a day or so and just focus on the swirling emotions. Hope is in the air, and we have a classic sell-the-news setup. It is going to be a wild day on Monday.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment