- Pre-market futures indicate the Dow opening up 150 points. As noted last night, the futures took off at the close as reports spread that the government was considering a ‘bad bank”. This entity would presumably buy toxic bank assets, store them, then dispose of them as the positions cleansed themselves with time.
- Adding fuel was trading pit idea that the Fed was buying treasuries.
- Most of today’s futures gains took place yesterday from 4:15pm to 5pm on light volume. So, some will look sceptically at this morning’s rise and fade, or sell, the opening. Anytime we have a significant opening, up or down, there is a high probability that money can be made by fading the opening. This is a day trade, maybe even an hour trade but it does seem to work.
- Banks stocks are up double digits this morning, even after yesterday’s 5% +/- gains. Wells Fargo reports today and that will be watched to see how the Wachovia integration is going. Unfortunately, Wells doesn’t provide a lot of insight during their earnings release. Indeed, analyst questions are mute due to the method of Wells’ release; a recording by the president.
- Consumer confidence hit all time low. Can’t see this getting any better next month as layoffs abound.
- The burden on traders this morning is to buy the fade. Should we see profit taking early with buyers steping in then we may really have something. Buying the dips is a strategy that hasn’t worked for several months. Should it begin working we may have something of longer lasting value.
- I bought more Abbott Labs yesterday.
Have a wonderful Wednesday!
