Optimism

by Larry Levin

Investors have their faith in equities back. With little new news of importance, equities exploded today adding 186.13 to the Dow and 21.06 to the S&P500. Investor faith is a fickle thing these days; how long will it last? The last 2-days this week should be a good barometer with the GDP and monthly jobs data scheduled for release.

Here is a list of today's news ---

1) ADP payroll data says 9,000 new jobs were created this month, which was said to be today's reason for the rally. The ADP data, however, is notoriously unreliable. Furthermore, do 9,000 jobs in a country of 300,000,000 people sound exciting to you? I didn't think so either.

2) The President signed the Homeowner Bailout for Deadbeats Bill today, further pushing America to an all out cradle-to-grave Nanny State .

3) The Federal Reserve lengthened its part in the nationalization of the US housing market. Comrade Bernanke will nearly triple the length of time a bank can get multi-billion dollar loans at just 2% in exchange for their worthless (as MER showed yesterday) collateralized debt holdings. Citigroup has the same CDO junk as Merrill Lynch had, which it just sold for a 78% haircut, so I have a question: If Citigroup has been getting loans from the FED for say, $10-billion, will the Fed now only loan $2.2-billion against it now? After all, it is only worth 22-cents on the dollar now; the market has spoken. Answer - hell no! What does the Fed care; it will just print more money. The Fed clearly believes it can, given a chance, improve upon free markets. Just give Comrade Bernanke a chance.

4) Bloomberg reports Q2 earnings for the S&P 500 Index companies have dropped 24% vs. a year earlier. The drop would mark the fourth straight quarter of lower earnings for U.S. companies. Once again, analysts got it wrong by predicting Q2 earnings would only fall 11%, which means share prices are still too high.

5) Oil explodes nearly $5.00-barrel due to unexpected supply draw downs. Who needs to worry about oil when you have optimism?

6) State & city budget imbalances are making their Governors and Mayors nervous. New York and California governors recently explained to the press there would be spending cutbacks (there's a thought!) in their states due to the economic slowdown. Mayor Daley of Chicago made the same announcement yesterday. Hey, where's their optimism?

Real Time Trading Signals*for

Trade Date: 7/30/08

E-Mini S&P Trades*
(before fees and commissions):

1) Engf sell @ 8:50am at 1274.00 = -2.00 (1 lot)

2) Engf sell @ 2:00pm at 1272.00 = -2.25*2

3) Missing huge trades by 1-tick is beyond cruel; chalk up another 3 today.

4) It was a viciously choppy #4 day!

5) Algorithm trades (9)...combined total...-12.75


E-Mini Russell Trades*
(before fees and commissions):

1) No ER trades filled today.


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