Monday trading opened with a big gap down that followed with profit taking and a bit of relief buying at the end of the day. Volume was average. VIX rose 10.96%.

The government told GM and Chrysler that they have 60 more days to put their act together or face “orderly” bankruptcy. GM CEO Rick Wagoner was forced out. Chrysler LLC was told to merger with Fiat or face liquidation.
In Europe, Spain was forced to rescue Caja de Ahorros Castilla La Mancha and Germany and Britain also moved to prop up lenders.
Over the weekend, Treasury Secretary Timothy Geithner said some banks still need large amounts of help. Thus the KBW Banks index fell 10.3 percent. Rumors spread that banks’ profitability on the first 2 months of the year were due to AIG money flowing directly to the banks via trade settlements unfavorable to AIG.
S&P 500 rests in no man’s land between the 50 day SMA at 790.82 and the downward trendline at around 783.00. Time will tell whether this is a retracement in the rally or the resuming of the bear market.
Also some argue that I may have gone a little bold crazy in this post.

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