Pre Market - August 10th 2007

Good morning rebels,

The first thing I want put up here is a chart for the S&P 500. In this chart I have highlighted the key support level that the market must stay above. If the market fails this important support level then we have another "signal" of a move lower could be in the future.

I want to express my sincere thanks to the many nice emails I have received from my post last night. It is my sincere desire to teach everyone how to be better traders.

The Feds have injected $19 Billion this morning. This has brought the fed fund rate back down to 5.25% (earlier it was up at 6%). Will this infusion of more liquidity control the bleeding? We can hope but the markets will answer this question.

Asian stocks had significant declines overnight and the European markets have been in the red by large amounts as well.

Goldman Sachs closes a hedge fund. Countrywide (CFC) issued a statement that they essentially do not know the extent of how this current financial situation will impact the long term health of the company. CFC is down significantly in pre market. Washington Mutual also down significantly this morning on (do I need to even say this anymore) credit worries.

On the last day of a very dramatic week in the markets I am expecting very wild swings today. There could be substantial dumping of shares and substantial short covering before the close.

You know who is going to be really making large profits from this huge volatility? The online trading companies. Those $7.00 trade fees are clicking in at a feverish rate with this huge volatility. I'm sure they are one of the few companies which are enjoying this volatility and record trading volume.

I am still very concerned of the longer term trickle down effect of this. I am watching same store sales data to give me an indication of where the economy is going. And this will assist me in finding good swing trade setups.