Talk About a Head Fake

The markets did what they do best on Friday, and that is sell the news.  In yesterday's update we mentioned that the markets looked like they wanted to go lower first before any rally.  I received a few phone calls with investors telling me that they should buy before the bail out is approved, because the market would explode.  So, I had to give this same speech close to 10 times on Friday, "It is better to miss the first 500 points of an up move, than to have the pleasure of sitting through the next 1,500 points down."  Traders far too often want to pick the bottom.  This is not a video game folks, this is your money we're talking about! 

Just when the Dow looked like it was ready to abandon all of the negative news, it did the unthinkable, dropped over 470 points in roughly 3 hours.  So at this point, it is all about investor confidence in the financial well being of the US and no longer the concerns about the TARP.  Until banks feel comfortable lending to each other, our markets are going lower.  Unless we get some unforeseen positive news to jump start this market, 10,000 appears to be inevitable at this point.