http://www.stockrake.com

Markets hate when Government intervention occurs. Especially non-telegraphed intervention. You could make the argument that it was rumored that Fannie Mae and Freddie Mac-ster would be taken over, but everybody was unsure if it would actually happen and based on how their stocks have been trading over the two weeks prior to this, you would have thought they might make it out of the Goonie’s tunnel unscathed without the treasure, but still riding the Pirate ship back out to sea.

So the Gmen made their move, the futures roared, and the market has since sold off its highs. These actions provide adrenaline boosts, but like adrenaline it wears off.

If Fannie and Freddie were to go bankrupt, faltered, collapsed, or suddenly their HQ’s took off like a space ship to fly to another planet to start their own financial destruction all over again the market would have called it a bottom. As long as they, FNM and FRE did it themselves. What happened this weekend tells us its worse than we know.
(PS I’m so biased to the short side you shouldn’t trust me.)

Now for a technical bottom, I want to see positive divergences forming while the general markets close lower.