A New Week

Well, I guess you have to give me a little credit. It may have just been dumb luck but I nailed Friday and what to do depending on how the market opened. We got the 1055 and the climb toward 1100.

The markets are still oversold though Friday helped. I don't have much of an opinion in the short term. I would think you short/sell between where we are now (1087) and 1100 using 1105 as sort of a stop.

The bounce right at the close on Friday I don't think really means much because it was driven in large part by options expiration. As a result that bounce could (emphasis could) reverse quickly. I would say that the bounce probably saved alot of Wall St. firms alot of money as it took alot of profits away from the put holders. Take JP Morgan. Closed at 40.05 after being around 39.00 most of the day. As a result, of the last 15 minutes all the the 40 puts expired worthless.

A large portion of Europe is closed tomorrow. I think Germany is as well. This will give them another day to work on things and potentially have some sort of surprise announcement going into Tuesday training. I would think any announcement would be bearish for the markets.

I would think the news of the weekend would be the seizer of CajaSur

The Bank of Spain removed the managers of CajaSur, a savings bank crippled by property loan defaults, and put the bank under a provisional administrator.

This thing is not small.

The board of CajaSur, a savings bank with assets of about 19 billion euros and 486 branches that posted a 596 million-euro loss last year last night rejected a plan to merge with Unicaja, a bigger lender based in Malaga, sparking the action by the regulator.

That is a pretty big institution though not probably manageable. This may be ignored or it may gain traction and cause more problems in the Spanish and hence European banking system. I don't really know but this things sometimes become a bigger issue a day or two later.

Anyway, another interesting week. It seems to me like the odds are lower in the short term but it also seems to me that at some point we will need to bounce or consolidate to alleviate some of the oversold nature of the market.