S&P 500 day trading sp500 emini futures coach Nov 5

Obama rally could be under way.

Fannie and Freddie moving market

A new era in mortgage lending begins today as Fannie Mae and Freddie Mac transition from Government Sponsored Enterprises to "government owned" and managed entities. The implicit guarantee behind Fannie and Freddie that we've known for decades is now explicit. The CEOs of both companies have been replaced and the companies have been moved into conservatorship by the U.S. Government. So this means the US government owns more of your home than most home owners do.

There are many unknowns, but one thing is clear... for now, the international and domestic stock markets have greeted the "mother of all bailouts" as positive. Stocks are moving significantly higher and treasuries are getting crushed in the stampede to equities. In fact, trading volume was so high in London this morning that the computer system at the London Stock Exchange melted down. London traders have been without access to their computerized pricing system for more than six hours.


Secretary Paulson and James Lockhart, the head of the Federal Housing Finance Agency (FHFA), have indicated that the portfolios of the "former GSEs" must shrink to reduce future risk to taxpayers. That's a nice idea, but who will buy mortgages in this environment if Fannie and Freddie decelerate their purchase activity? And, what kind of mortgages will Fannie and Freddie be buying in the future? Will they take on more or less risk? Will they continue to be saddled with the obviously impossible dual responsibilities of creating shareholder value while meeting the affordable housing goals of our government? Congress needs to define the roles of these two companies for the long term.

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Aug 5 hourly pre fed

this is pre fed charts this AM.

Watch for them to bring it up. We are getting alot of commodities rolling over, could be a good kick off for a further retracement.

Gold also looks like it is about to roll over.

Budget deficit, Merrill and housing

Treasuries fell on speculation Merrill Lynch & Co.'s sale of securities linked to mortgages may signal that losses at banks and brokers are reaching a peak, reducing the haven appeal of government debt.

U.S. debt rallied yesterday as stocks slid and the International Monetary Fund said there's no end in sight to the U.S. housing slump. Two-year note yields fell 14 basis points, the most since July 14, to 2.57 percent. Treasuries underperformed European bonds and emerging market bonds as investors demanded higher yields on U.S. notes to compensate for the prospect of increased debt issuance.

The U.S. budget deficit will grow to a record $482 billion next year, the Bush administration said yesterday. Government borrowing needs will rise to $171 billion in the three months to Sept. 30, $59 billion more than predicted in April, the Treasury said in a statement in Washington yesterday. The budget shortfall reflects dwindling tax receipts because of the economic slowdown, the cost of a $168 billion stimulus package and spending on the wars in Iraq and Afghanistan.

European Central Bank raises rates ahead of Fed

Treasury 10-year notes rose after the National Association of Purchasing Management-Milwaukee manufacturing index dropped to its lowest since October 2001 and stocks of several financial firms fell.

Citigroup Inc., Merrill Lynch & Co. and Lehman Brothers Holdings Inc. were among the firms that declined. The purchasing association's monthly index of regional manufacturing fell to 39, its fourth straight month below 50. A reading lower than 50 means the number of manufacturers that said business deteriorated was greater than the number saying it improved.
Treasuries earlier fell, extending the biggest quarterly decline since 2004, as inflation in the euro region rose to the highest in 16 years and oil advanced above $143 a barrel.
The retreat pushed 10-year yields up from a three-week low after a European Union report showed the rate of euro-region inflation climbed to 4 percent, bolstering the case for the European Central Bank to raise rates. Why are they ahead of us?

Crude oil for August delivery rose as much as $3.46, or 2.5 percent, to $143.67 a barrel in electronic trading on the New York Mercantile Exchange. It reached $142.99 a barrel on June 27 after the Fed left interest rates unchanged at 2 percent. The market continues to struggle with what to do with the rise in oil.

S&P 500 and the Economy. Financials wounded.

Looks like we are getting some blood letting in the financials today. ML, GS, and Citi announced layoffs that could be in the tens of thousands.

The Big three car makers, GM, Ford and Chrysler, have huge inventories of SUV's, Trucks and other gas guzzlers and have no inventory of economy cars. We could see one of these Bankrupt this year as all three have been downgraded by S&P to"credit watch negative."

Combine this with our Airlines declaring that the they will post losses of 18 Billion......this year.