Yesterday, I expressed reservations about the bounce.  Today, those reservations were confirmed in a brutal way. 

Everywhere I look, the market is a world of pain.  The S&P 500, the Nasdaq and the Russell 2000 (which I am short) all closed below the closing levels last Friday while the Dow is essentially flat, meaning that the GSE nationalization counts for nothing in the market, at least in the short-term.

The market did hold.

This one, we have to give to the bulls.  At 2pm, after the margin sellers were finished doing their thing, the buyers took off and ramped up the market. 

Volume was huge, with NYSE Composite volume at 7.2 billion, the fourth heaviest of the year. 

The best line I've heard so far regarding the bail out of Fannie Mae and Freddie Mac.

The market's reaction to today's news is critically important, I think.  The talking heads were generally gushing over the bailout this morning.  If we don't finish strong today, or if the market doesn't respond favourably tomorrow and Wednesday, this is likely a strong sign we're heading lower.

From Bloomberg

- Sir John Templeton.

The government bails out Fannie and Freddie.

Johan Norberg takes Naomi Klein to task once again on Klein's rebuttals to claims of mistakes and misunderstandings of the topics she critiques in The Shock Doctrine.

An exert

An emerging market is a market you can’t emerge from in an emergency.

– Don Coxe

Indeed.

It's late so I'm going to let the charts do the talking