Random Thoughts

What an interesting day in the markets. The S&P rallies near the open and then does an about face for about 30 points before turning higher into the end of the day. The twins of the US Government, Fannie and Freddie, took another beating today. The homebuilders, which I indicated were a very key variable for the dollar, also saw some intense selling. I was looking for a correction coming into today though I did not realize we would see an full fledged whoppin. As those FRE's and FNM's collapsed, I started to feel panic again. Perhaps this is a good sign. Of course, when I felt that panic, I just got up....took a deep breath and waited for things to calm....all better!

Anyhow, this market had a bunch of interesting things going on today.

• The dollar and homies correlation held strong today. The Euro found some support as the selling looks like it might slow for the rest of this normal vacation time of the year. I used to call August an mean reversion type month: Essentially nothing happened so the given index return to the mean or if something happened, by the end of the month, the index returned to where it started.
  
• Some people are getting a bit perplexed by the movement in rates. Today did not really support my risk coming off the table idea but it continues to catch the eyes of stock traders.
• Gold bounced but I continue to remain bearish...grain markets were very strong today in the face of buyers right off the bat. This reminds me of the commodity trade when the bulls came in on Monday, purchased the markets and let them run for the rest of the week. Old habits die fast.
• Since when does Barrons' become the mouthpiece of the government - via the FRE and FNM news today. If true, does this mean Paulson does not support these two companies in their current form, as he indicated a month ago?
• Anybody know if Barrons track record is any good?
• Hearing that the window is closed again to preferreds. Tell that to the major banks that did them last week.
• 1275 is kind if important on the S&P. Keep an eye out for it.
• 117.50 remains a roadblock for crude. I still like my call for lower prices.

Have a good night.