Bears still in the driver’s seat …
A rally in Asia … just enough to create a nice gap in the Dax … which could have been faded as it was created exactly at the top of the (bear)flag … Sell signal reached its target late afternoon … See below …
Copyright by Tradestation
A quite perfect flag, I think I will use it in the educational section … so stay tuned as I will build it up 
But back to the market … downgrades on US financials and a media report that Citibank will lay off 45k workers, brought the market back to reality. But not all was bleak … After last weeks conference at Merill Lynch had Bear Stearns announcing that it will take a write down of only 1.2bln$ in Q4 … expectations saw them at about 3bln … said balance sheet now “clean” at BSC … and Lehman announced that they reduced exposure since August by 17bln$ … today HSBC moved on their SIV’s moving about 35bln$ to their balance sheet, which they described to be an EXAMPLE to other banks even a BENCHMARK … remember … HSBC was the FIRST bank which acknowledged the problem back in February!
Despite that, JP Morgan named a new risk manager … who worked before at … YOU already KNEW IT … GOLDMAN SACHS … so it becomes every day more difficult to find a bank which is not run by an EX-Goldman-guy … OMG
Most importantly … the FED announced that it will start running some “longterm” moneymarket tenders to assure liquidity over the yearend.
Technically the market should after this first reaction to the upside find a bottom quickly and then make a new reaction high … this will then show, whether we will have a rally attempt towards the yearend or keep selling off.
Tags: Chart, Citibank, education, FED, financials, flag, Goldman, HSBC, subprime
