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MV Weather Report: Cloudy, with a Chance of Bailout


Rain or shine, we review the day's biggest stock stories.


The market was in wait-and-see mode today, with the bank bailout plan postponed until Tuesday. The decision was made in order to focus attention on getting the fiscal stimulus bill through Congress.

Today on the Buzz, Minyan Peter filled readers in on his thoughts.

"My sources in Washington tell me that with 60-ish Senate votes already in place for the stimulus bill, the President did not want to risk upsetting the apple cart with what is likely to be a very expensive -- I mean, very 'comprehensive' -- TARP 2.

"Furthermore, given the dead-on-arrival reception of TARP 1, I expect we'll see choreography out of Washington over the next several days that would do Martha Graham proud."

Today was an uneventful session, as the S&P 500 closed at 869, pretty much unchanged from Friday's close. This week is sure to be an interesting one. Here's Toddo's look at the week ahead:

"The risk, on a trading basis, is that we rallied into the news and absent something seismic (suspension of mark-to-market), traders will again sell the news. Again, we're looking through a pure trading lens (journey) as opposed to the big picture destination, which continues to haunt Hoofy.

"Know this: The next 4 days won't be short on action, so use this lull to craft a plan. While there is always two-sided risk to any market, there is acute two-sided risk at this particular juncture. Make sure the mechanics of your swing are constant regardless of directional bias and trade to win, never trade 'not to lose.' "

Tomorrow should be an eventful day, its Turnaround Tuesday, Ben Bernanake testifies on Capitol Hill but the focus of the day will be on Geithner's bank plan announcement. Todd maybe correct, the market may be set up for a sell the news scenario. For other opinions, check out Jeff Saut's weekly article and William Fleckenstein's column. For readers looking for individual stock plays, Jeff Cooper had some good thoughts on the Buzz and Banter today:

"Google (GOOG), Apple (AAPL), and Research in Motion (RIMM) are on a mission to test their respective quarterly swing highs.

"They may stop shy and tag the low of the high bars of the 4th quarter high.

"For GOOG this is the Oct. 1st high of 417 or a test of the 394.50 gapper on October 14th. Note the gap down from 383 from 10/03.

Click to enlarge

"For RIMM the Quarterly high mark is 67ish. Note the backtest from that level on October 14th.

Click to enlarge

"For AAPL the Quarterly high water mark is 116-117. Note the large range reversal that day and the backtest into the first week of November of that level. "

Click to enlarge

Have a great night, Minyans!

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No positions in stocks mentioned.

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