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Two Ways To Play: Is the Bailout a $700 Billion Flop?


Strengthen your portfolio in good times and bad.



According to the Wall Street Journal, a survey of more than 400 firms by the Securities Industry and Financial Markets Association shows that financial companies are hesitant to participate in the Treasury's $700 billion bailout plan because of a lack of clarity.

Originally, the department said it would purchase troubled assets within weeks of receiving Congressional approval. But the department has since been focusing on a separate program: The investment of $250 billion in the banking sector. Nine in 10 expressed an unwillingness to participate in the so-called Troubled Asset Relief Program (TARP), while approximately the same number spoke of their reluctance should the Treasury require warrants in return for taking on toxic assets.

From the Bull Pen: Consider AutoZone (AZO). Bad times are better for this stock and a pullback to $110 support could be good opportunity. One option is to enter if and when it reaches that level.

From the Bear Cave: Professor Adam Katz warned on the Buzz yesterday to keep an eye on General Motors (GM) and General Electric (GE) because credit implications. If these break to the downside, one can expect the Russell 2000 ETF (IWM) to make new lows. Bears playing this can set a buy stop above the $52 level, but be conscious of a bullish inverse head and shoulders pattern if it doesn't make new lows.

Quick Check Around the World

Asian trading closed with the Hang Seng 3.29%, Sensex 2.36%, Taiwan 1.03% and Shanghai 1.75%.

Glancing towards Europe, we see the CAC 0.35%, DAX 0.54%, FTSE 1.44%,

As of 7:45 a.m. EST, S&P Futures are trading +10 to 915, and Nasdaq futures are +20 to 1251.

A Look At Commodities

Crude oil
is trading +1.48 to 62.25. Gold is +7.00 to 739.20. Silver is +0.045 to 10.100 and copper is +2.900 to 175.15.

The dollar index is -0.254 to 85.637.

On the Radar


08:30 Change in Non Farm Payrolls
08:30 Unemployment Rate
08:30 Change in Manufact. Payrolls
08:30 Average Hourly Earnings MOM
08:30 Average Hourly Earnings YOY
08:30 Average Weekly Hours
10:00 Wholesale Inventories
10:00 Pending Homes Sales MOM
04:00 Consumer Credit

Happy Friday! Good luck and have a great weekend!

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No positions in stocks mentioned.

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