“Greenie Spun My Rally”
The shorter the term, the more random market is. Today Greenie helped bear traders to test session bottom (I guess) near 12100 at about 12:40ET, 3 H after Dow’s touching 12106 at 8:45ET. So double top at 12180 and double bottom at 12100. Have we seen both top and bottom for today?
Per Bloomberg.com, “Greenspan opined on the sub-prime mortgage world, saying that spillover was a possibility but there has not been any indications it was happening yet. (He also said that he has been a good boy since leaving the Fed & has not been talking about rates...just recession...sub-prime spillover...spending...carry-trade...)”
Corporate bond mkt seemed to have recovered a little bit today, at least not getting worse, and iTraxx Crossover 10 Y closed at 326.50, down from 340 of yesterday. And some commentators started saying that subprime was overblown:
"It's something that is specific to the financial sector and in the last month, the financial sector has lost quarter of a trillion dollars in market cap in the United States, which is a lot more than the potential losses, not to mention all the other banks marked down around the world." (Reuters)
Greenie’s subprime just scared market a little bit.
Later session trading always proves challenging to me, and I guess that’s also when MM start closing their shops, and they may not like seeing small traders on their way. So, better staying out.
