Market Recap

The Four Sisters were greeted with enthusiasm Monday morning after the government stepped in to rescue Fannie (FNM) and Freddie (FRE) over the weekend. After the SPX hit overhead resistance of 1270, more financials worries came to the forefront as Lehman (LEH), AIG (AIG), and Washington Mutual (WM) all hit new lows as credit default swaps continue to blow out.

The market did show some signs of positive divergence as the XLF was able to hold above its August lows. As mentioned last week, a retest of 1200 is highly probable especially if the XLF can not hold above its August low. Trade ‘em smart and trade ‘em tight.

The Four Sisters Performance



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Top Headlines

Crude oil briefly dipped below $100 on Friday for the first time since April 2nd. Investors are concerned that a slowdown in the global economy will hinder demand. (9.12)

Dow component AIG fell almost 30% over the company’s large exposure to the mortgage market. The stock is down 70% on the year. (9.12)

Mortgage rates dipped lower this week after the government bailed out quasi-private mortgage giants Fannie Mae and Freddie Mac over the weekend. Lower mortgage rates boosted refinancing applications and home long purchase requests. (9.10)

Rail shipper CSX (CSX) boosted guidance and plans to increase its capital expenditures to meet growing demand of rail cars. (9.11)

All eyes will be on Hurricane Ike this weekend as the Category 2 hurricane heads toward Texas. (9.12)

150 years of Lehman Brothers appears to have come to an end as the credit crisis seizes another major financial institution. The stock is now down more than 95% from its 52 week high. The government has said it will not “foot the bill” as the company struggles to find a buyer. (9.12)

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