CFC, BSC, FNM, FRE, LEH, MER.....   these were some of the most respected names just a couple of years ago.    It's not an understatement that it was once an envious thing to work for one of those companies.    One question we are wondering these days is that where will the new MBA graduates go nowadays?    Sarcasm aside,  it seems we are making historical headlines on a daily, hourly basis.   Well,  it sucks to be a trader these days and it sucks to own any of the financial stocks and it sucks even more if you happen to be an employee of the companies that are in question these days.   We definitely have our strongest sympathy to those who are the true casualties of this mess.

The real and only question remains on most people's mind tonight is, "how many more financial companies will fail?"   A list of companies that are in immediate danger seems to grow day by day, WM, WB  maybe...and this list can definitely grow.  Bets on government action related to individual companies is currently off because it appears they've made it clear during the last few days that it will not inject anymore taxpayer's money to bailout any troubled financial entity.    In our opinion, we wish them good luck coordinating "private" entities doing all of the rescuing.     So, is this a good thing?   In the short term, it probably isn't and we are definitely going to see much more turmoil and pressure.    In the long term, allowing troubled companies to fail may be a good thing.   It probably ensures that mistakes will not be repeated by other financial companies in the future without the constant reminder of pulling a Lehman!

As far as market goes, we continue to be in a total "watch and see" mode as the drama unfolds minute by minute.     Market technicals are pretty depressing and we'll almost for sure test July low's on all major indexes with a good chance to go lower still.   SPX, has now violated 7/15 lows making 1170 next support.  At this point, we prefer evidence of a purge to see a bottom and the afternoon had signs of it.  Sideline money conviction may be gained by a big downside day was the thought recently, but unless AIG pulls of an amazing all night-er,  today's big sell off day may not be enough just yet.    As many people believed, the biggest story of this week is now AIG and it will have to have an ending one way or another very soon.    Again, all bets are off as to the outcome of AIG and market impact because it's simply not worth to bet on unknowns.  Don't forget the unwinding of Lehman assets is going to take time and companies big and small will be stating their exposure to Lehman that may hurt a few too many.  Things such, companies lending Lehman shares for convertible notes offerings will cause dilution to some stocks is one example of an unknown to the unwinding that will occur.

Tomorrow, we have the Fed day and as well as GS, BBY reporting in pre market.    Anyone care to wage on the reaction? lol  Again, as we have mentioned a while ago, short term pain can definitely ensure a healthier trend down the road.   If we can somehow get all of the bad stuff cooked in during the next month or two, with real action, maybe then we can start seeing some stability and potentially a turn toward the end of the year.

Bottom line, we are still monitoring the trading action closely and looking for trading opportunities if they come up.  Just by today's action, you could see how foolish it would have been to go long anything thinking the market was bouncing off morning gap down.  The market seemed balanced,  no aggressive selling early and made a few thinking of a reversal, bounce underway.   This is why we said,...'to each his own' ..and ' be safe', as it is easy to get fooled in this environment.  Things will stay very volatile next few days and it's absolutely essential not to get caught up emotionally with this market!.  Let's see what we wake to, including the possibility of the FED doing something before the open.