Tuesday, February 10, 2009

02.10.09 - Mid-morning Cliff Dive

The market's are showing their displeasure with Treasury Secretary Geithner's vague presentation, down 2% to 3% across the board. Financials (XLF) are down over 6%. Also, recall that markets were largely short-term overbought, and the news value of this speech was leaked yesterday in a likely trial balloon, leaving us even more susceptible to a correction on the event's passing.

While cumulative tick has been horrendous, to say the least, there are currently signs of a nascent recovery, a prospectively significant supportive volume spike has been put in, and the VIX appears to be moderating for now. That said, look closely for potential resistance at the VWAP and each respective floor pivot level throughout the day. Cliff dives like this usually don't recover easily.

Close: Usually and didn't! Really bad performance by the Treasury. I still have limited shorts on. I won't be surprised to see follow through selling, but don't want to be greedy either.

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