Keene Little : 9/28/2008 10:41:06 PM
Monday's pivot table: Link
On SPX I've been watching the uptrend line from September 18th and it held all day Friday. On Monday morning it will be just under 1196 and will be an important line to watch in the short term. A break below 1188 would be bearish and there would be a strong potential for a fast decline from there. But if the market gets an initial bounce Monday morning (Sunday night futures don't necessarily tell us what Monday will do) watch to see if 1235-1240 act as resistance. This is the 62% retracement of last week's decline and a Fib projection for an a-b-c bounce from last week.
If SPX rallies and stalls there I think it would be a good place to try a short play. The stop would have to be fairly wide near 1250 since that's the key level to the upside--above that would be a bullish move and strongly suggest we'll see a rally at least to 1315 if not 1350. 120-min chart: Link
Just below the 1235-1240 Fib resistance is the price level resistance in the 1220-1225 area (previous support in July and September and recent resistance) and then the broken long-term uptrend line from 1990 (using Log price scale) that's currently near 1228. Needless to say, the bulls are facing a wall of resistance in the 1220-1240 area so be careful if we see an early rally up to that area. Daily chart: Link
Tab Gilles : 9/28/2008 10:09:18 PM
(Reuters) --The following summary of financial rescue legislation due to go to the floor of the U.S. House of Representatives on Monday was circulating among lawmakers on Sunday:
SUMMARY OF THE "EMERGENCY ECONOMIC STABILIZATION ACT OF 2008"
I. Stabilizing the Economy
The Emergency Economic Stabilization Act of 2008 (EESA) provides up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit, which is vital to a strong and stable economy. EESA also establishes a program that would allow companies to insure their troubled assets.
II. Homeownership Preservation
EESA requires the Treasury to modify troubled loans - many the result of predatory lending practices - wherever possible to help American families keep their homes. It also directs other federal agencies to modify loans that they own or control. Finally, it improves the HOPE for Homeowners program by expanding eligibility and increasing the tools available to the Department of Housing and Urban Development to help more families keep their homes.
III. Taxpayer Protection
Taxpayers should not be expected to pay for Wall Street's mistakes. The legislation requires companies that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may experience as a result of participation in this program. The legislation also requires the President to submit legislation that would cover any losses to taxpayers resulting from this program by charging a small, broad-based fee on all financial institutions.
IV. No Windfalls for Executives
Executives who made bad decisions should not be allowed to dump their bad assets on the government, and then walk away with millions of dollars in bonuses. In order to participate in this program, companies will lose certain tax benefits and, in some cases, must limit executive pay. In addition, the bill limits "golden parachutes" and requires that unearned bonuses be returned.
V. Strong Oversight
Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250 billion immediately, then requires the President to certify that additional funds are needed ($100 billion, then $350 billion subject to Congressional disapproval). The Treasury must report on the use of the funds and the progress in addressing the crisis. EESA also establishes an Oversight Board so that the Treasury cannot act in an arbitrary manner. It also establishes a special inspector general to protect against waste, fraud and abuse.
Tab Gilles : 9/28/2008 10:05:22 PM
Goldman seeks to buy up to $50 billion in assets: Link
Tab Gilles : 9/28/2008 10:04:06 PM
Fortis Gets EU11.2 Billion Rescue From Governments Link
Tab Gilles : 9/28/2008 10:03:22 PM
Wachovia May Get Bids by Citigroup, Wells, Santander Link
Tab Gilles : 9/28/2008 10:01:05 PM
WASHINGTON (MarketWatch) -- Democratic congressional leaders announced their agreement Sunday on details of a massive financial rescue plan proposed by the Bush administration, releasing a draft text trumpeting taxpayer guarantees and caps on executive compensation.
The draft bill, titled the "Emergency Economic Stabilization Act of 2008," follows days of legislative wrangling over a $700 billion plan proposed by Treasury Secretary Henry Paulson as U.S. financial markets teetered on the edge of a collapse triggered by the U.S. mortgage crisis.
The bill will be introduced in the House of Representatives Monday morning and then head to the Senate, said Senate Majority Leader Harry Reid, D-Nev.
"This isn't about a bailout of Wall Street, it's a buy-in so we can turn our economy around," House Speaker Nancy Pelosi, D-Calif., said at a press conference announcing the agreement.
The draft legislation would authorize $250 billion immediately, with another $100 billion upon presidential certification. A further $350 billion would also be available subject to congressional approval.
Emergency Economic Stabilization Act of 2008 Link
Summary of Emergency Economic Stabilization Act of 2008 Link
Section-by-Section of Emergency Economic Stabilization Act of 2008 Link
OI Technical Staff : 9/28/2008 9:59:59 PM
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Tab Gilles : 9/28/2008 5:17:34 PM
Buffett powers into electric cars, buying 10% of BYD Link