There was no shortage of news events today, and that made for some very chaotic action. The Geithner/Paulson hearing didn't have much market impact, but we danced around quite a bit on AAPL's new product announcement and the Fed interest rate decision.
Once the news was out, we were oversold enough to finally see a late-day rally, but there is still is some nervousness about the possibility of an unfriendly State of the Union address tonight. Many stocks, particularly the financials, have already taken a beating on concerns about an unfriendly Washington, so it wasn't too surprising to see them lift late in the day as shorts moved to the sidelines and the optimists established some positions.
The important thing to keep in mind is that this market has been damaged by all the selling lately, and it is not recovering quickly or easily like we saw so often last year. We are always going to see some relief bounces after a period of struggle, but we really have to be much more skeptical about the likelihood of straight-up, V-shaped bounces. It happened a lot last year and surprised a lot of technicians, but this year the action has a different feel to it. The dip-buyers, in particular, are not exhibiting the same resolve.
I suspect that President Obama will be praised once again for his oratory skills. If he downplays his class-warfare theme a bit, that would help the market a bit, but ultimately the financial sector is going to be painted as a villain that must pay a price. The bulls may be able to produce some more upside, but I don't believe the bears are going to let them run very far. The market trend is shifting, and we need to respect that possible fact.......
long AAPL
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