Confidence: low

My confidence is extremely low, going into Thursday short. I have a sneaking suspicion that an overwhelming amount of 'govt pressure' has been put on these FASB nerds to make the 'right' decision on the pending MTM decision.

On the flip side of that coin, wouldn't it be almost too obvious to load up on FAS before their announcement? Does the market want to reward such an obvious play? Plus, is the market really stupid enough, to think that if a company, all of a sudden 'pretends' that their assets are worth more than they really are, that this will increase shareholder value? Probably. Because the market is controlled by people - and people are stupid. I can't tell you how many articles I read today about how great the econ reports were, sweeping the jobs data under the rug. And home sales are improving because rates are being manipulated lower and the govt is giving 1st time home buyers 8k cash. Does this mean the economy is recovering?

In either case, the market doesn't reward people for knowing what it 'should' do. If it wants to ignore bad news and go up, it will. That said, from a technical perspective, no damage has been done yet - I'm just nervous about tomorrow - knowing that every time the rules change, it can be very tough on the shorts in the short-term, even though none of the rule changes ever have a lasting positive effect.

There is tons of overhead resistance but be aware that the reaction to the MTM ruling could knock your short little socks off. Be prepared to liquidate or hedge with some FAS, TNA, or other things that have a 3x in their name.

SPY - still well within its 'channel of cooperation'