“Greenie Spun My Rally”

“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.