One wouldn't think that this market could continue to act so poorly for so long, but with news like AIG saying the $80 billion or so it has already received from the feds isn't enough to keep it operating past next Monday, buyers are just moving aside. It is just a mess out there, and even the serial bottom-callers are becoming frustrated.
What is really weighing on the market right now is lack of a clear plan for banks. We have talk about stress tests and more lending, but isn't AIG an example of how bailouts are likely to play out? And where is Geithner? Why aren't we seeing something bold and confident when the market obviously is looking for leadership?
At this point, we don't really need to spend a lot of time analyzing all the things that are pressuring this market. We are now down almost 15% since the disastrous Geithner announcement about a bank plan, so we are becoming oversold. It has looked to me for a couple days now that a bounce was due, but we just have not had any good catalyst to force shorts to cover and get the flippers running.
President Obama is giving a prime-time speech to Congress tomorrow night, and I suspect that we could see some buying in front of that. I'm not sure there will be anything momentous, but there is no question he can give a great speech and may help brighten the mood temporarily. In any event, shorts will likely want to be out of the way.
Even if we do manage a little pre-speech bounce, this market obviously is quite confused and has no confidence in governmental plans. There isn't much else to do but to stay out of the way.