Just after market closed ES SP 500

Oh please President Bush, one more bowl of Financial Stimulus.

After Hours we will hit 56 to 58, big gap up on open.
If it closes, watch out for the bottom.   More bad earnings and down we go.  
Entering into a three day weekend, I can see us consolidating in the 56 to 58 and then down all  into next week.

Correction on the way 1272

Small chance of a rally.
Trade what you see, and always use stops.

Futures Trader

Money cheap goods (oil, gold) expensive Get it?

1/2 a point cut gives us a cheaper money and inversly more expensive goods.  Gold at $950 a real possibility.   Oil,  oh no.  US Gov't increasing us stock piles of oil every day.  They are buying, do you think this is the high.....not even close.

We shall see.  I expect a move up tonight hitting resistance and then an open gap through mid am trading.

We are headed for a correction soon.  Watch out below.

Rebel Trader.

MBIA downgrade is coming

Treasuries rose as Federal Reserve Chairman Ben S. Bernanke reiterated the need for interest rate cuts and a report showed manufacturing in the Philadelphia area tumbled this month. The Fed chairman acknowledged before Congress that the economy is weak enough to need a fiscal stimulus and reinforced expectations for the Fed to lower interest rates at least half a percentage point this month. This year's bond rally has pushed yields on two-year notes to the lowest level since 2004.
The two-year note's yield fell 6 basis points, or 0.06 percentage point, to 2.45 percent at 10:28 a.m. in New York. The price of the 3 1/4 percent security due in December 2009 rose 1/8, or $1.25 per $1,000 face amount, to 101 1/2.
The fallout from the collapse of the subprime mortgage market may widen. MBIA Inc. and Ambac Financial Group Inc., battered by losses from the collapse of the subprime mortgage market, fell the most ever in New York Stock Exchange trading on concern they will lose their AAA credit ratings. Losing the AAA ratings would cripple the bond insurers' business and throw doubt on the ratings of $2.4 trillion of debt the industry guarantees, causing as much as $200 billion in losses.
Merrill Lynch & Co., the largest U.S. brokerage, reported a record loss after writing down at least $15 billion of failed investments, ousting its chief executive officer and losing almost half of its market value in 2007. U.S. builders broke ground in December on fewer houses than forecast, making last year's decline in homebuilding the worst in almost three decades.
Many of you are wondering where rates are headed. One expert predicts..."rates are at extreme lows. The economy continues to slow and the Fed will cut short term rates further. These actions are inflationary and should drive long-term (fixed) rates higher.

ES SP 500 Daily testing 49-50

Testing of 50

There is more in store for this one.  Sentiment is more powerful than policy.  Ben speaks and the market falls.

Futures Trader

S P 500 Daily

  Probably will test to 1398 1400 on ES

Market Notes

The 10-year note's yield rose 2 basis points, or 0.02 percentage point, to 3.70 percent at 11:54 a.m. in New York, according to bond broker Cantor Fitzgerald LP. It touched 3.61 percent, the lowest since July 2003. The price of the 4 1/4 percent security due in November 2017 fell 6/32, or $1.88 per $1,000 face amount, to 104 15/32. The two-year note's yield increased 4 basis points to 2.53 percent.
Fed funds futures on the Chicago Board of Trade showed a 40 percent chance the Fed will reduce its 4.25 percent target rate for overnight lending between banks by three-quarters of a percentage point by its Jan. 30 meeting, compared with odds above 50 percent earlier this week. The balance of bets is for rates to be cut by a half-point. The central bank hasn't eased by more than 50 basis points in a single move since Oct. 2, 1984, when it trimmed the target rate by 1.75 percentage points. Policy makers cut rates in increments of 50 basis points twice in January 2001.
The Fed will release its Beige Book regional survey at 2 p.m. in Washington. The report, a summary of anecdotal information on current economic conditions gathered by Fed banks and named for the color of its cover, is traditionally provided two weeks before a meeting of the policy-setting Federal Open Market Committee. Fed Chairman Ben S. Bernanke testifies to Congress tomorrow on his near-term economic outlook. In a Jan. 10 speech, he pledged ``substantive additional action'' to prevent a recession and said more interest-rate cuts ``may well be necessary.''

Could see some upward bias on the ES We shall see the 1398 to 1400 Tested

The News and the market

Wholesale inflation increased 2007 by the largest amount in twenty-six years. The Labor Department reported that wholesale inflation was up 6.3 percent for all of 2007, reflecting a huge increase for the year in various types of energy costs ranging from gasoline to home heating oil.

Meanwhile, the Commerce Department reported that retail sales fell by 0.4 percent in December. It was a worse-than-expected decline and increased worries that the country could topple into a recession.

The combination of rising inflation pressures and a weak economy represent a dilemma for the Federal Reserve over whether to cut rates to boost economic growth even at the risk of making inflation worse. Last week, however, Federal Reserve Chairman Ben Bernanke sent a strong signal that the Fed is more worried at the moment about weak growth than inflation -- given a series of weaker-than-expected data in recent weeks.

Business confidence is essential now as business capital investment helps lead the manufacturing sector and the economy overall.

Futures Trader