Cautiously Optimistic

If we get to SPY 86-89 I will be adding to my shorts. I remain cautiously optimistic that we head lower - as I see 10 reasons to go lower for every 1 reason to go higher. I am not attempting to time this move - it could be one day or one month - but will continue to add to my short position at each key level of resistance.

SPY


UPDATE: Biggest Dow Point Gains and Percent Gains

Those GD Fibonacci lines

General Dynamics (GD).  Fibonacci retracement levels from 2004.

AIG to get loan

It looks like AIG will receive a Barry Bonds sized, syringe-filled liquidity injection from the govt tomorrow. Just in case this week's market action has left you cowering in your Financial Armageddon Bomb Shelter (FABS), the following briefly explains the core of AIGs liquidity issue.

[Moody's] cut AIG's rating two notches to "A2" from "Aa3" Monday, while Fitch Ratings cut its rating two notches to "A" from "AA-minus."

The downgrades mean that AIG's trading partners can require the insurer to post an additional $14.5 billion of collateral, and make $5.4 billion of payments if some contracts are terminated early...

This isn't the same liquidity issue that de-balled the likes of BSC, LEH, MER, etc. but it's all related. I also believe 'saving' AIG is far more important than doing so for LEH. The implications of AIG filing bankruptcy would be magnificent.

Look for a short-term market rally but don't be fooled - we likely haven't seen the lows of the year.

Check out the 10 year Fibonacci's on the DJI - right at the 50% retracement level. If it gives way.... 10,000 will be the next likely target.