“As the market falls aggressively, we find that there are further developments from authorities that act as ST supports for the Dow. But the real concern is that each crisis has been followed by a bigger crisis and this just does not feel like the “capitulation blow out””
Also here are some observations from Barry Ritholtz about the Fannie and Freddie nationalization:
“Six observations/questions/takeaways from the past of weekend rescues history:
1. A strong rally lasts for a while, but it eventually fades and makes a new lower low;
2. Each “rescue rally” has been shorter in duration and weaker in intensity than the immediately prior one;
3. Friday’s close becomes your new line in the sand; If and when that is breached, look out below.
4. The pre-Asian open news pattern reveals the Asset price focus is a large part of these issues; It also speaks to our overseas creditors/Overlords;
5. What form of free markets have we evolved into? It is not Capitalism, it is not Socialism, it is not intelligent regulation. WTF is this?!?
6. During the prior 5 interventions, the VIX was at cyclical record highs. This time, the VIX was at a much more modest level (22)