Tomorrows Market

Monday, September 22, 2008

In yet another extraordinary development for Wall Street, the Federal Reserve said late Sunday night that venerable investment banks Goldman Sachs and Morgan Stanley will become bank holding companies.
The Wall Street titans will be allowed to transition into holding companies following a mandatory five-day waiting period, and will be able to take advantage of credit from the Federal Reserve Bank of New York in order to complete the transition.

Upon completion, Goldman and Morgan two of the biggest and most powerful investment banks on Wall Street, would join the ranks of and compete with Citigroup, JPMorgan Chase & Co and Bank of America

In a short statement on its web site, the Fed said it authorized the New York Fed to extend credit to U.S. broker-dealer subsidiaries of Goldman and Morgan against all types of collateral that can be pledged at the Fed's primary credit facility for depository institutions.
The Fed also made the same collateral arrangements available to the broker-dealer subsidiary of Merrill Lynch.
The Fed's move is the latest milestone in a jaw-dropping couple of weeks for Wall Street and American business. Goldman and Morgan were the last two independent investment banks, following the filing for bankruptcy of Lehman and the acquiring of Bear Stearns by JP Morgan this spring. Bank of America, meanwhile, is buying Merrill Lynch.
By Robert Schroeder, MarketWatch

The rules keep changing in this game and its impossible to tell from one day to another where the market will be going. Danger lies in holding stock over night unless you are in for the long term. Its not what i want to say here, but it is reality and it doesn't mean you cannot make money in the markets, but you need to be involved each day and not just buy and hold. Going forward I will be focusing more on intraday moves and intraday set ups based on

1. Relative strength trades: Relative strength refers to how strong a stock is relative to something else. This could be either how strong it is compared to the overall market or the industry group that it is in. ( see below Trading Manual excerpt)

If it is stronger, than then we say that it has relative strength. If it is weaker, than we say that it has relative weakness.

2. Embedded Stochastics: When an Embedded Stochastic develops, it means the trend is getting stronger in the direction the market has been going.

3. 20-50-200 chart set ups: A method i scan for when the a stock breaks out of a downtrend line and consolidates above the 20ema then moves higher as the 20 ema moves under the price.