R.C. Market Report 10.10

• Market Trend: Downtrend

• I believe we have a bottom today. I'm not talking about The Bottom of this bear market, but one of several short term bottoms within a bear market. Economically, we remain in a mess. Government regulations have increased and will continue to increase. Government is printing infinite amounts of money and ceases to stop. Hank Paulson announced that the government will inject liquidity directly into the banks. So we now have the government in possession of mortages and banks in America. We are moving further away from preserving a free market in this country.

• Nonetheless, I am a trader who enters and exits in matter of days, not years. I am also a technical trader, inexperienced when it comes to deciphering future fundamental catalysts. What I saw today was an early morning flush out that marked a floor. After 7 straight days of watching the knife fall, we finally saw it hit the floor. And the knife bounced, an 800pt move in the Dow. We retested that low later in the day and the support held. Now, I do not know how long this support will hold. But at least we have a floor to build on. That's the glimmer of hope. We also had the biggest volume of this bear market. Another sign that adds validity to today's support.

• It remains a highly risky environment and a Monday confirmation is absolutely critical. I have not made change to the Market Trend at the top of this entry. It remains as a downtrend. However, I sensed a restoration of natural balance on the trading floor today - shorts taking profits, longs picking up bargains, etc. Letting the market sort itself out is a huge step towards recovery. We also found out that Lehman's swap auction priced debt issued by Lehman at 8.625 cents on the dollar. At last, we've got transparency on debt issued by one of these troublesome banks. While I don't fully understand this process in detail, I do know that just as the market touched a base today, we now have a price to calculate off of for making more accurate assessment of these swaps floating around. This is another huge improvement that adds to the glimmer of hope.

• With proper money management, you can minimize risk in playing this bottom. GE up 13%, C 9%, JPM 13.5%, AAPL 9%. There's definitely money to be made out there.