We definitely got some better participation on the downside yesterday afternoon but on the whole it was not really a panic. This AM the theme seems to be that yesterday was more likely an end than a beginning. That is the camp I am in (I pitched my tent last week), but I would guess patience is still the order of the day with the trade being crowded. SPW, EXTR, and TTN performed strongly and are in good technical shape.
FNM will reach the bottom of its upward sloped range around 65. With the bears recently stumped (stomped if you prefer) by the positive market reaction to the preferred issue I would say this is the best chance since '03 of breaking lower. The level should hold at least once if you have a strong heart and a full wallet but given the way the stock moves around being short with a stop around 68 seems like the better trade.
I was stopped out on my AUD / Yen trade and will probably revisit that theme late next week. There was some chatter yesterday that after Chinese New Year (Feb. 9th) the exchange rate of the Yuan would finally be adjusted. The chatter went on to say that Japan would not let the Yen strengthen whatever China does. It may be the case that Japan will intervene and maintain a semi-fixed policy against the dollar but my guess is that the market will want to test the theory at the 100 level before letting them off for rhetoric.
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