Bits and Pieces

What an interesting market today. The buyers who were hanging around the 1265 level yesterday were doing the same today around 1285. It was a persistent bid though if you look at the volume numbers, the sellers really were not that aggressive today. Market conditions, as I will talk about later this weekend, were not exactly bullish - new highs jumped a bit but new lows did not sink enough. There were other stories in the marketplace that I found of interest which could explain the lack of interest in the equity markets as these stories were all ex-stocks if you will.

• The Lehman takeover news was an interesting tid bit. S&P futures immediately jumped on the news but that exuberance was unwound as the day went on. I am not sure if this company is taken out or not but there is some big betting going on in the marketplace if they will actually still exist by the end of September.
• GSE's sinking was not the story today - at least not on the preferred side. Essentially the market is pricing back in the fact that these subordinate securities will be worth something. Interestingly, generally speaking, when subordinate debt does not get paid, the company is most like bankrupt. So does that mean that the Preferred will not bet paid if FNMA and FRE go into bankruptcy? Oh, didn't the government say that could not happen?
  
• Speaking of bankruptcy, it appears that anyone who is in financial trouble is putting out there hand to the US Treasury - today's client is the US automakers who could be asking for as much as $40billion. I don't think that is going to be supportive for the dollar. AT the same time, do you really think the treasury will give out a handout to an industry that is riddled with high costs and low margins?
• As for the dollar, nice reversal today followed by the nasty reversal yesterday. I think too many people jumped on the dollar express and yesterday they all reversed. Today they all covered. The COT data showed the highest net long position since 2005. The fact that the greenback recovered today supports the continued rise higher. The homies are also holding gains and climbing.
• On the trading front, I have been cutting back positions in my portfolio. I just don't find the current environment exciting. Perhaps a big move by the S&P over the 1300 level could stir the pot a bit. That is what I am playing for as I am holding some S&P and NDX exposure to the upside.

Well, that is about it. Have a good night.