As usual, gap down proves to be VERY buyable, it remains my favorite TREND EVER! Fading the Gap = ROCKS!
Of course, we rallied for several reasons, one was/is the belief that LEH marks some sort of inflection point, the same way BSC did and the same way FNM and FRE supposedly did. LEH looks more than likely to be worthless and the Fed and Treasury are trying to figure out how best to let everyone know. Never know, maybe they are worth something, they seem to think so, but it doesn't look good, that's for sure. It's certainly no inflection point regardless. MER looks like it wants to follow LEH and C should come after that. WM was actually rallying after hours.
If LEH does go out worthles, what does that say about the general health of the financial markets? The problem is, we are still in a state of denial, as though the problem really isn't all that bad. And, that it'll work itself out one by one. I love that, yes, that might be true, one by one all these companies are going to go out of business, so it'll all be fine and dandy!
We are still stuck in this trading range of 11,100 to 11,600. Until we break one way or another we'll just keep bouncing in and out of those ranges. Now there is a call for the Fed to lower rates again! Why is it that people refuse to learn that the Fed can not and never has saved the stock market. They could cut rates to zero, we're still screwed, sorry, the truth hurts, and as I have said before, I hope I'm WRONG! I would love to be wrong, but these bounces we get are shorts covering and PRAYER, and thats all.
A gap down Friday should be BUYABLE, though. RIMM reports earnings next week and the calls for the Fed to cut should stall a huge selloff for now, though I wouldn't be rushing out to go long for more than a trade, if at all. Gap fade either way should be decent off today's move. We'll see, but if the 11,600 level holds then we have a decent downside move coming up here shortly.
C feels very heavy to me, if it tries $20 again I think its a gimme short. We shall see what we shall see soon enough.