ES 1-19-09

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833 is possible.

860.5v is a good target on the upside

BruceM are you bruce9432?

Sorry this is so late.... but thought it was still worth posting.
Courtesy of Larry Pesavento


As most of you are aware the rest of the world does not recognize many of the US holidays. This morning's opening in London was quite dramatic. Prime Minister Gordon Brown announced that the Bank of England was injecting another infusion of capital into the banking system of the United Kingdom in order to stimulate banks to lend to consumers. Brown also chastised the Royal Bank of Scotland for their shady banking practices, poor investments, and speculative use of margin. RBS stock dropped 60% percent in a matter of hours. Up until that time, roughly 330 in the morning New York time the US stock market was up strongly. As Brown was making his speech stocks in the US started to decline. At the same time the U.S. Treasury bond market was dropping precipitously with over a three point move. Whether this is a start of a larger download of or just a correction remains to be seen. What is interesting is that the bonds were not used as a flight to quality as a stocks were dropping.

The euro and the pound also dropped as news of the Bank of England decision and the price drop of the Royal bank of Scotland. Crude oil and gold also dropped.

We live in markets that operate 24 five. 24 hours a day five days a week. There is no getting around it but it is also what makes the swings so volatile and pattern recognition so useful.

I will update the markets this evening and hopefully we will have some good opportunities on Tuesday morning January 20 which is our "combust" date. Keep in mind that there is a possibility that the market could accelerate to the downside similar to what happened on October 8 when we had come bust. That was the acceleration point of the October drop.