Before the Open (May 7)

Good morning. Happy Friday.
Heck of a day yesterday, huh? It wasn’t a 100-year storm, but it was certainly a once-every-10-years event…or considering how the markets are so connected and the prevalence of computers that trade on autopilot, perhaps we should expect them to happen more often.
All the losses suffered after 2:30 have been recovered, but there’s still some sorting out to do. The Russell futures are up this morning, and TZA, the leveraged small cap inverse ETF is up about 1.8%. With all of yesterday’s hysteria, the closing levels didn’t always make sense. Instead of a derivative stock like TZA trading based on its components and small cap futures contract, it traded on its own, and evidently it didn’t close where it should have.
Anyways, with all but one stock on our Short List hitting its target and all the reverse ETFs on the Long List also hitting their targets and with the need for the market to achieve some sort of equilibrium, today could be a crazy day. Temporarily the charts are meaningless – as I stated yesterday it’s all about fear and greed and the emotional condition of market players. Other than skilled day traders, today is a good day to take off.
For reasons I discussed yesterday (which I’ll expand on this weekend) I do not think we’ve seen the bottom. Maybe we get a little pop here; maybe a gentle drift up will follow, but despite yesterday’s internals being the worst I’ve even seen, more downside is needed before a sustained move up can begin.
More after the open…and of course I’ll have more to say over the weekend.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Earnings Reports
this week’s Economic Numbers