FEAR and GREED in Action

Friday's market looked like capitulation selling, the type of panic that often marks an important bottom. Monday's turnaround was waited for all weekend, as the world leaders met to "become one giant bailout", and resurge the market. It appears, for the short term, that world government intervention and guarantee may have stemmed the tide, just as the capitulation selling at 7700 Friday may have "slowed the fear".

It is important to understand that first GREED developed this market situation, begun in the U.S., and developed with supply side deficit build trickle down economics led by a liberal Republican administration. We took away all regulations, and allowed Wall Street to lead their greed, and our own. Insurance on subprime mortgages became a bad bet, and by the time Bernanke and Paulson brought it to the world, it was too late.

That same GREED led the world to follow us, with the same false books, and the same lack of attention to details.

And we followed it with FEAR. As the market began panicking, the news took over the events, and we saw a world lead to FEAR and panic selling. It is that easy to ignore all reason, and we saw a perfect example of FEAR and GREED in action.

This past weekend was, in theory, the "answer". The world waited for a solution, and the solution was "intervention". Without any sense of logic as to how and what this does the world reaction was one of relief, of being quick for "solution", and only later will we all begin to consider who and how we pay for the nationalization of our banking, worldwide.

Of course, both Presidential candidates now have economic plans:) Hopefully, we as an American people will this time study what supply side Keynesian economics does NOT do.

And soon, we will figure out what this "bailout" will cost.

The market hit massive new highs of 9468 on a almost 1000 point gain.

Many traders wrote us Monday asking when we would buy puts.......and smartly, we did not during the day on Monday. We have a new signal to a November call today, noting to buy at "best buy", on what may be an opening downturn.

Downside will occur, the "happiness" may not last, but let's watch for a bit more euphoria.

There will be more euphoria, highly likely. If the continued plunge protection team action shows magic and euphoria, watch futures, and buy our recommended calls at up to 20% above prior day close, watching our Dow projection tops carefully.
Two way trades are still likely, and we're watching.

WASHINGTON (MarketWatch) -- Global efforts to rescue the international banking system gathered force Monday, with Europe leading the way to provide money to shore up its financial sector and calm the nerves of consumers and investors, and the U.S. hinting it's on board with its own package.
U.S. officials were putting finishing on Washington's version of a rescue package and announced they would unveil it before the U.S. markets opened Tuesday.
Treasury Secretary Henry Paulson and Federal Reserve Board Chairman Ben Bernanke met with top chief executives of the largest banks and Wall Street firms, and after the meeting details of the package began to leak out.