SP Hourly Chart Update II for 10 February

We broke the first level of short term support on the prior SP Futures Hourly chart and dropped quickly to the diagonal trendline around 828 where the bulls are trying to find a footing.

Although we still have some short positions for the 'daytrade' we have hedged them out now and are looking to buy weakness in the metals and oil.

Careful, since if we slip here we go down to test that support around 822 with some intermediate support and possibly the prior lows around 806.

Generally, we think the banks and traders are crabby that Tim didn't give them their fix, and are showing their displeasure. Therefore on 'context' and not the charts we'd look for 820 and even more probably 806 to hold. They are cranky but not yet openly self-destructive.

Do not rule out a snap back rally to stay within the trend, beartrap style.

If the Obama Administration would like to do something constructive in the markets Tim should announce some trading reforms like reinstatement of the uptick rule, a vigorous enforcement of the rules against naked shorting for all stocks, and aggregate position limits on commodities, But that is not the style of the compromiser. Something has to be done to restrain the blatant speculation while the banking system is sorted out and the investment banks die a slow death but are still capable of throwing their weight around. Recall that early in his Administration John F. Kennedy made a point of forcing Big Steel to very publicly roll back their price increases when they tested his resolve.

"They pull a knife, you pull a gun. They send one of yours to the hospital, you send one of theirs to the morgue."

And presumably he would abstain or at least be very discreet with respect to high priced hookers crossing state lines.

Today's Non-Announcement From the Treasury

Unless we are missing something, The Plan (hereafter known as TP) does not disclose how the bad assets will be valued and the procedure by which they will be removed from the various banks' balance sheets.

Today's announcement appeared to be a Public Relations event in which the Obama Administration sought to distance TP from the tainted giveaway program for the banks which it was under Hank Paulson and the Bush Administration.

So again, we will have to wait, and the market has no resolution, and remains 'edgy.'

A noble endeavor perhaps, but this Administration risks being long on appearance and short on substance. We suspect there were no details because they are still being 'discussed' behind the scenes.

Again, from what we hear, it is the 'old guard' of Clintonistas versus the Obama inner circle. Larry Summers can be quite the hammer head, and Tim is just over his head. Perhaps he will grow into the job. Perhaps Larry will be fired (again) because of his political tin ear.

The Look of the SP Futures Hourly Ahead of Turbo Tim

Festina lente. (Make haste slowly.)

In other words, watch for fakeouts and do not be too quick to hit that buy or sell key. This can go either way.

If Timmy has done his homework the Working Group should be prepped to buy if the market doesn't. Hank would have done so.

Sometimes the right thing to do is absolutely nothing until the market tells you which way it will go.

This is one of those times.

It ought not to matter to the Obama Administration how the equity market reacts in the short term. That is like asking a new batch of crack addicts how they like their first week in rehab.

To elaborate in response to a question, I look at multiple markets for confirmations, not simply one chart like the SP futures. The NASDAQ 100 futures are a ctitical component of this mix for example.

UBS Reports Record Loss

Although the financial services sector made up a significant 15-17% of GDP, in recent years prior to the global financial crisis it had been driving almost 50% of Swiss GDP growth according to government reports.

As they have been known to say up Zurich way, "A greedy person and a pauper are practically one and the same."

AP
Swiss bank UBS reports 4Q loss of $7.57 billion
Tuesday February 10, 2:24 am ET

Swiss bank UBS AG reports fourth-quarter loss of $7.57 billion, exceeding analysts' fears

ZURICH (AP) -- Swiss bank UBS AG said Tuesday it lost 8.1 billion Swiss francs ($7.57 billion) in the fourth quarter and announced it would cut a further 2,000 jobs as it refocuses on its home market after a troubled year abroad.

The results exceeded the fears of analysts, who on average had predicted net losses of 6.2 billion francs ($5.79 billion).

A year earlier Switzerland's biggest bank had reported a net profit of 1.33 billion francs. The latest results bring its full-year loss to 19.7 billion francs for 2008.

UBS said it plans to refocus on its core activity in Switzerland, its international wealth management franchise, and its global onshore business. To this end it will create two new business units. Wealth management and Swiss bank will be led by Franco Morra and Juerg Zeltner, while wealth management Americas will be led by Marten Hoekstra.

UBS is also shedding 2,000 jobs at its loss-making investment banking unit, which has been blamed for many of the bad investment choices that have seen the bank write down tens of billions of francs (dollars) since mid-2007.

The Zurich-based bank said net new money outflows from its wealth and asset management businesses reached 85.8 billion francs during the fourth quarter...