Market Notes: 08/31/07

08/31/07: Good morning traders! Despite this being traditionally one of the lightest trading weeks of the year, the bulls put on an impressive show yesterday, rescuing the markets from an early drawdown. We were able to cover our Q's short hedge for a nifty gain early, and re-shorted later in the day (twice) for further gains on the late-day slump. But the last 20 minutes were something else...as if the overnight news about Bush's "suprime rescue" speech had been leaked to the street...hmmmm. Today Bernanke gives his speech (not yesterday as I had reported) and with Bush outlining a rescue plan for subprime loans, and reform measures, traders are ramping the futures to the highest levels I've seen in many months in anticipation of good news coming from the two chiefs. Are we being set up for a "gap and crap"? In all likelihood yes because volume should be light going into the holiday weekend and without sustained buying pressure there will be a dropoff. I myself plan to fade the opening gap on the first sell signal for a quick turn trade.

Other stocks I like (but not risk worthy for our newsletters), all long: ELON, SPWR, GRMN, ESRX, BOOM, FWLT, MTOX, BIDU.

A reminder that US Markets are closed on Monday.