Looks like the Ivy league hedge funds got dusted by the White House Texas mafia! I said yesterday it was getting scrappy, and I was betting with the Fed's.
But Wells Fargo showed that it was the shorts were out of ammunition, and they were covering with both hands, and they're not laying out any shorts into this ramp.
Tomorrow, JP Morgan reports earnings before the opening, and Google reports after the bell.
So we get another back to back.
Consider that about 50 different hedge funds got subpoenas in the last week. Trading records, positions, IM's and phone calls. Anyone thing that these folks are doing this trading in a vacuum? Of course not. Look at the action today. Where was the selling?
The Fed was successful in shifting the "fear factor" into those betting against the system. Without a dissemination of their viewpoints, markets go on and the system survives.
With the huge moves in the banks, does anybody really think that AIG at 23 is still going down? It's already fallen 30 straight points. Anyone that missed the move in BAC, JPM or WFC today will lump AIG in the "too big to fail/bail" category and will be emboldened to buy this number, especially after JPM reports. It will be lumped into the big financial institutions, and will rally right here, and right now.
And it will bounce hard.
And option pressure could cause it to rally to the 27 strike this week, just like option pressure helped the big banks and brokers today.