End-Of-February Relief Trade

Good morning. Premarket futures are showing a positive bias. Strength in overseas markets and news that the U.S. government plans to increase its stake but not fully take over Citigroup and other banks eased some of the nationalization fears we saw last week.

In other news, investors are looking at the latest Chicago Fed Index, Treasury advisers have started lining up the biggest bankruptcy loan ever in case General Motors and Chrysler need it, and another survey of business economists remains bleak. We also have a fresh press release from the government regarding the new Capital Assistance Program.

Premarket gainers: C, FITB, MS, BAC, WFC, JPM, GE, OCNF, NCX, BCS, DRYS, RBS, HST, BQI, ACAS, ALD, ICO, GNW, LVS, GEOY, EGLE, PALM, UAUA, SNAK, ZION, GERN, FSLR, ENER, & SOHU.

Premarket losers: GOLD, UBS, CS, MT, WYN, NYT, AEF, HCS, HS, & BRKL

Today we have the 10:30 Dallas Fed Manufacturing Survey and Fedpeak from both Lockhart (12:40PM) and Fisher (6:PM). Beyond the latest from the government and financials, the two big market movers this week will be durable orders and the GDP. Traders will also be watching for any hints of stability in the housing sector as new home and existing home sales reports are provided.

While the Monday after expiration is often a negative day for the market, we're oversold enough here for a short-term relief trade. After that, things get much more difficult to figure out especially given the lack of clarity and confidence in the market, financials, and the government's plans. In the S&P 500, for example, we could rally up into the mid 800s and still not change the negative technicals so, while we have room for a profitable relief trade, we have a long way before the damage we've seen is repaired.

Let's make it a great week!