Oh well, what do you know?

Thought AAPL was going to destroy the confirmation day. It was not because of the 75 bps Fed rate cut, which actually sent a bad message to the consumer in a sense. It was the banks and the regulators that got together to bail out the bond insurers. The Fed rate cut frankly will do very little to help the situation. Further, how do you size the risks of the fancy securities and derivatives that those big boys committed to but with very little understanding. In any case, with 250 billion in deficit a recession is almost certain in 2008.

Technically, today's low was a bit below s1 of 599 and because of the bond insurers late news which triggered off a huge short covering. Mind you, buyers were small by comparison. It closed at 627 well past r1 622. If you have a drop to s1-s2, you will get a rebound. The same thing can be said here. A rise to r1-r2 will almost always get a pull back. This is also in light of the fact the the DOW has traversed 500 points in one day. Now are we there yet? The weekly H&S was completed. Therefore we expect a rebound of approx 38% to 630ish and tomorrow's numbers are 631, 616 and 605. 631 is the forecasted number, only if it takes out 631 and closed above 637, the down trend is terminated. Volatility ratio has not indicated a turn yet and other inidcators are saying potentially but not confirming. The next few days are important but the feeling is that it is not finished yet. Expect more volatility to come.

2c