SP Futures Hourly Chart at 1 PM EDT - An Appearance of False Vitality Amidst Wasting Disease

Breakout or Fakeout?

The trigger for this rally was an internal memo to the Citigroup employees from Vikram Pandit, designed to bolster morale and most likely the stock price when it was widely leaked to the press. Vik gets a freebie on this one since the memo was 'internal.' No accounting for numbers, right? lol.

Citi CEO Pandit Defends Group Strength

Traders are choosing to interpret this as a positive sign that 'the worst is over' and are squeezing the short interest from an oversold condition. Here is a story on Citi from the WSJ. Does this sound like all is smooth sailing?

U.S. Weighs Further Steps for Citi: Regulators Plan for Contingency - WSJ

Anyone who actually believes the financial crisis is over based on this 'leaked internal memo' is a true believer indeed. In what we are not sure.

Let's see how this rally plays out. Here are the support and resistance levels.

Anything is possible here in the Speculation Nation.

By the way, Turbo Timmy Geithner will be on PBS' Charley Rose talk show this evening. He will say that things are getting dramatically worse in the US economy. But they are committed to fix our dire financial problems no matter what they must do. (hint: print).

Singapore: Three Years of 'Vicious Downturn" - Buys Gold, Loon, Renminbi and Yen - Sells Dollar and Pound

The projection that the Government of Singapore Investment Corp (GIC)has calculated for $3.8 Trillion in financial market writedowns over three years is interesting, considering we are only a third of the way there.

Remarkably, the selection for investment safety that Mr. Yeoh Lam Keong puts forward is very close to items served at the private table of Le Café Américain.

Interesting nonetheless, in particular because of their holding in Citigroup and UBS, and any insight they may have gained therein.

Reuters
Singapore's GIC sees more distress in markets
By Kevin Lim and Saeed Azhar
Tue Mar 10, 2009 2:35am EDT

Fancies gold; to avoid dollar, sterling currencies

SINGAPORE, March 10 (Reuters) - An official from the Government of Singapore Investment Corp (GIC) said he expects more weakness in financial markets in the next 12-18 months, and recommended investors hold gold and other safe assets such as government bonds.

GIC, one of the world's largest sovereign funds with an estimated $200 billion-plus in assets, has invested aggressively in troubled global lenders, picking up multi-billion dollar stakes in Citigroup and UBS in late 2007 and early 2008.

There is "systemic capital inadequacy globally", and the world will probably see "three years of a very vicious downcycle," GIC's director of economics and strategy, Yeoh Lam Keong, told the Investment Management Association of Singapore conference on Tuesday

"This is a very destructive process for assets."

Yeoh, who said he was speaking in his personal capacity, showed a slide prepared by GIC that indicated global writedowns in the financial sector could reach $3.8 trillion by 2013 and that only about 30 percent of the losses had been booked so far.

Yeoh suggested investors hold gold, sovereign bonds and currencies such as the Japanese yen, Chinese yuan and Canadian dollar.

He said he liked gold because governments were under pressure to cheapen their currencies to compensate for falling demand, and that some countries such as the United States and Britain would eventually be forced to monetise their debt by printing money.

"I would avoid these currencies like the plague," he said in reference to the dollar and sterling.

SP Futures Hourly Chart

Although there are many ways to play a market intraday, as indicated by the short term trendlines in red, the US equity markets are in a downtrend that is rather difficult to dismiss.

When will it end?

We are not sure what the catalyst will be, but at least an intermediate bottom will be reached at some point. In the meanwhile short term relief rallies and short squeeze attempts, such as we saw this morning, will occur on an almost daily basis.

Chris Whalen: Tim Geithner is a Disaster and Will Be Out by June

"Tim Geithner has no financial skills. The only reason he is there [the Treasury Secretary] is to protect Goldman Sachs."

Interview with Chris Whalen of Institutional Risk Analytics on TheStreet.com