With the "big bang" bank bailout announcement now set for Monday night and the jobs report due out on Friday morning, we have some interesting conditions in place for traders. This bank news is so highly anticipated that it is almost too obvious as a sell-the-news event.
As is the Obama administrations's style, I suspect we are going to have the details of the bank plan slowly leak out before the actual announcement and that we MAY see the sell-the-news happen before the news is out. The bulls may manage a few more good size spikes as some of the details are leaked, and they will run over the overly aggressive shorts, but is it smoother sailing from here? Not sure.
The jobs report tomorrow will also be important. Consensus predictions are for a loss of 500,000 jobs, which is certainly going to give us some ugly headlines. However the inclination of market players lately is to buy bad news. They did it this morning on the weekly unemployment claims, and with the bank news also pending, I'll be looking for a strong inclination to buy a dip on the jobs report.
This market is extremely tricky with everyone trying to game well-known news events. We are still within a trading range, and the big picture of the indices is nothing at all to be excited about, but the intraday action will almost certainly stay quite volatile over the next few days.