Uncle Sam Bailouts

Good morning. Premarket futures are in rally mode after Freddie Mac and Fannie Mae were taken over by U.S. government. With this historic government bailout, money is being put to work aggressively around the world. On Friday, the FDIC shut down yet another bank.

In addition, as Uncle Sam reaches into the taxpayer's pockets to save the financials, as you may expect other industries are quickly lining up for big government handouts. We are indeed starting a new era in America!

Premarket gainers: TGIC, TMA, UCBH, AGNC, COV, ABK, GEOY, BAC, WB, HBAN, ZION, WM, FITB, JBHT, SAPE, RAMR, BBX, PMI, NLY, ANH, MSPD, HOV, CMO, HITK, ACAS, UST, HITK, C, LEH, MER, GS, JPM, ETFC, SCHW, CSIQ, HOKU, CSUN, CLNE, ESLR, SPNC, DRYS, VSEA, JRJC, RMBS, & GM.

Premarket losers: BIOD, AUTH, BKUNA, ATVI, AAI, PKD, & HRB.

Whether or not you agree with the era of government bailouts now sweeping the system and/or doubt how effective they will ultimately be, the market will no doubt like the fact that the Fannie & Freddie uncertainty is now removed from a psychology standpoint. As such, I expect the market to make every attempt to gain back all of last week's losses if not make another attempt to break above the S&P 1300 level again. In fact, if we don't see that kind of rally develop, it will suggest that this market remains broken and unsuitable for most long positions. That's how important the reaction will be to this news.

Let's make it a great week!