Today's Market Action

I was ecstatic about today's market action until right at the close. After the banks get slaughtered three days in a row. for the banks to post a measly bounce and the market to be flat most of the day was exciting as the market consolidated after several day sell off. Then the last 30 minutes came it and erased alot of the excitement. Markets rallied across the board and the XLF closed at the days high and closed above 20.25. In the big picture it would be completely natural for XLF to move back to 21 and the S&P to go back to 1290. That would not be bullish if they went up those levels only not to break them. Despite the sorry close I still think this was just a little rally after two massive sell offs days. We will find out tomorrow.

I got several emails and texts all days about how great the markets were doing with FNM and FRE down so much. I am not sure they matter all that much anymore. The consensus is that the debt will be backstopped and the common equity will be wiped out. The market knows that and unless perception or reality changes in some form or fashion I don't really think FNM and FRE matter so much. I think it is much more about LEH, AIG, and GS.

Interesting how this Russia thing is playing out. The ante is definitely increasing. So far the markets (including Europe) are shaking it off. I don't think there will be any military confrontations but there could still be some significant economic fallout yet to come from the tensions.