Flat

Markets will most likely be trading flat today, saving their energy for the fed policy announcement tomorrow at about 2:00 est. I wouldn't be suprised though to see some continued profit taking and see the markets close a little down today. Tomorrow should trade a little up in early morning trading before choosing a direction.
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The Mountains

I love the mountains, I love the rolling hills, I love the praries, I love the dafadills...well...anyway...In the past week the market has certainly climbed a very very high mountain. The rally we experienced was very powerfull. We rallied near 1000 points on the Dow before topping off today. Can you believe in this financial crisis tha JP Morgan Chase for a short time today traded at 30 times earnings! This when most bank stocks are trading in the low teens if not single digit P.E.s. FAZ, a 3X bearish financial etf is looking very very tempting right now. It traded more volume than ever before today and closed with a bullish japanese candle (hammer). Still, a trend this powerfull doesn't just turn on its heels and run without the greed seekers at home watching cnbc buying into the last eeks of the rally. That, plus the fed meeting coming up on wednesday could push this market to retest it's highs tuesday or wednesday before plummeting again. Keep you posted on the FAZ trade.
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Stress

Markets will probably end the day just a little to the upside. Monday the govenment stress tests will be done on all the major banks to see if they would make it through "worst case" scenarios. I think the markets will initially rally at the results of the stress tests. Once the details are hashed out, and everyone remembers that economic conditions remain pragmatic. By wednesday of next week we will know if we are in a 1-3 month bear market rally or a dead cat bounce. My personal feeling is that late next week we will be well on our way to testing the previous lows set on the DOW. Markets don't just go crazy bullish without retesting their lows in times like these.
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Tradable Rally?

Retail sales figures were much better than expected. GE debt did not get downgraded nearly as much. Pfizer came out with a really sweet cancer drug. Will we have a sustainable bear market rally? Personally, I think we are going to need to see more good news to continue this rally. Although there are some signs of things bottoming out, I am going to wait and see if this isn't just the eye of the storm. The next week to week and a half will tell a lot.
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Been Nice Knowing Ya Dollar

The U.S. Dollar has been showing some major weakness as of late. If you want to buy TIPS, today would be a great day to buy in.
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Trade Alerts

Buyers are scared out of their minds, costs to insure corporate debt skyrocketed tuesday even as the market rallied 380 points. LQD has continued to sell off, pricing in more credit risk. I am short ABT and XOM for a quick swing trade. We will at least test the previous low within the next few weeks.
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Market Bottom

Yesterday enbattled and beleagured Citigroup came out and said that they were profitable profitable for the first few months of 2009. That is excellent, and here I was thinking they were dead 3 times over on their balance sheet. However, I guess if you get bailed out and get billions and billions of dollars in bailouts you would think that money could turn a profit at some point or another. I am not convinced we have hit a market bottom. We are at least going to test the previous lows. At the same time if this does turn out to be a powerful rally then I will be perfectly fine with changing my bias toward the market and participate in some bullish trades.

On another note we are seeing that pullback in oil I mentioned in previos posts. I will be ready to buy into USO or ERX with about 1/5th of my portfolio soon. Chances are that oil has hit bottom and will trade flat to up until the market turns around. Then prepare yourself for big gains in oil. The pending inflation and the increasing demand in developing countries will send oil screaming to higher levels than 2007 even saw.
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