Actions Of Desperation

Good morning. Premarket futures are in rally mode on speculation that the Fed is preparing to unveil new plans to boost liquidity. Such actions, if taken, following yesterday's disappointment will most likely irritate market participants even further unless the Fed really does produce some shock and awe to restore its credibility and do it soon. In spite of this speculation, global markets traded lower even though not with the same level of disgust we saw after the yesterday's decision.

Premarket gainers: NEXT, CRME, NUVO, CRIS, MTW, CSIQ, ACAD, GERN, IOM, SCON, LEAP, MPG, LNUX, CEDU, ACTG, SOLF, CPSL, SNCR, CHNR, GERN, XING, DRYS, SPWR, FMCN, TBSI, ESLR, PCU, FRO, SMSI, GIGM, JASO, MICC, FCEL, BIIB, CSUN, RGLD, GRMN, ZIXI, and CROX.

Premarket losers: FRPT, UNTD, COO, OFI, ADY, ULTA, NUAN, FBTX, NWK, and AKAM.

Along with comments by Alan Greenspan this morning, we have the reports on business inventories but this market will remain held captive to the Fed. Clearly, these rumors suggest this morning that some were caught leaning the wrong way and they're praying for the opportunity to get out of some positions at higher prices. As you know from reading other thoughts on the Fed, it isn't unusual for the market to bounce around for a few days (if not produce a counter trend rally attempt) in order to figure out what the Fed's action really means to the market. The stakes are even higher now than ever before because we have only 13 trading days left of 2007.

Be careful out there and resist the temptation to trade every swing we are likely to see from now until year-end. From premarket trading, it clearly looks like the same speculative targets are in back in play - namely China, Solar, and Shipping and those who have to grind it out will be using these groups to press for performance. Take care.