I am about to head out on a business trip so I won't be able to post for a few days so I need to be brief. I should be back on Thursday. Today was ugly.
Here is today in a nutshell: The market was looking for some answers on how to get out of this mess and Turbo Timmy gave them nothing but proposals. If you are the Treasury Secretary and you plan on announcing a recovery plan to help get us out of the deepest economic crisis since the Great Depression, you better come prepared with solutions because that's what the market is expecting. The last thing the market wanted to hear was "We're working on it".
This has further shattered confidence that the current administration has their hands around this disaster. Its pretty apparent that they don't and are completely overwhelmed by the severity of the crisis.
I'll say it again folks. There is no answer to this economic nightmare. We don't have the money to pay for what the banks have done. This became crystal clear today. You are hearing nothing but rumors and proposals coming out of the Fed right now because they have no answers!
Expect more of the same in the oncoming weeks. I really don't know how we get out of this without some severe pain over a very long period of time.
I kept all of my shorts on from Friday so needless to say it was a nice day from a trading perspective. TBT was my one loser. I dumped that in the early afternoon. I ending up closing about 70% of my short positions at or near the close. There is no sense in being a pig! One of the key reasons I did this was because 820 on the S&P 500 held. This is a key technical level. If we break through this in the next few days, we most likely retest the 741 lows.
I think a 741 retest is highly likely at this point given today's developements. Geithner looked very uncomfortable at the podium during his press conference. He seemed very unsure of himself and appeared to lack confidence. He seriously needs to work on this or he is going to have no credibility. At least Paulson looked like he knew what he was talking about when he was up there!
Today was a devastating reversal for the bulls considering they have had their way the last few days. There are many trading counts that were just completely blown to hell as a result of this destruction.
I kept a few shorts on in case we see some follow through, but they are light positions because I will be out of town.
Good luck trading the next few days. Lets all hope the market doesn't fall into the abyss as a result of the disasterous Geithner news conference. I am starting to get that Sept/Nov. feeling again and thats pretty frightening considering the DOW sits under 8000 this time!
Bottom line here guys and gals is we seriously need leaders in DC that can help restore confidence! I saw nothing of the sort today.