Today the market tried its best to move up until Standard and Poors downgraded GM's debt to Junk status and shortly thereafter said the same thing about F. The market immediately decided to sell off on this news and dropped nearly 100 points in a short period of time. Of course, they took care of all the worries about that and then bought the market the rest of the day only to end down about 44 in the Dow. GM fell on the news and traded around 31 most of the rest of the day, ostensibly due to Kerkorian buying shares at that price, yeah right.
One other news item of note was a bomb going off near the British Consulate in Manhattan just before the market opened this morning. And, by coincidence, the Brit's were having an election for Blair today, which he and his party won, but not with a big margin.
Tomorrow morning we get the monthly status on Employment which usually makes for interesting trading. I have been trying to think of a way the market could open down tomorrow and I can't come up with one. If the jobs are less than the expected 175K, the will buy them due to the Fed being able to slow down their incessant increases in the funds rate. On the other hand, if they are more than that, the economy is on the mend. So, the market should rally at the opening tomorrow.
We of course are interested in putting on more short positions but really can't justify a clear cut trade this evening. Maybe we can recommend a better trade on Sunday evening. Until then...
Dow Industrials 10340.38 -44.26