So what did you make of the “The Bernanke & Geithner Show”. From my point of view it was a little under whelming and they portrayed themselves badly. Tim Geithner did come across a little better towards the end but still the confidence wasn’t there. As for big Ben Bernanke he seemed, stressed (which I understand), unprepared, nervous and jittery. His answers weren’t confident and he lacked conviction.

For these and many more obvious reasons like the lack of detail the markets roundly sold off. The DOW ended -380 down just off the lows of the session while the NASDAQ ended down -66 points. Generally I think there is agreement that this show gets the thumbs down. It will be interesting to see do the markets perk back up or continue down tomorrow.

My views recently haven’t wavered much and my prediction of an Obama rally is something I still haven’t discounted. If the new president gets his team into place quickly and declares decisive action (whatever that action is) we may get a relief rally. If we do we could rally back to 4200 on the FTSE 100 but in the meantime my strategy is neutral as I weigh up my options. I may dip in and out but until we allow settling in time for the new presidential team I can’t help feeling there is also risk to the upside.

My plan is to wait as I have been burned too many times before for the rally to occur. Then I start small positions building into a larger short on the FTSE. For the moment anything around 4000 and I will buy small amounts with tight stops. Here is a breakdown of the longer-term plan.

Entry: 4200 – 4500 FTSE (June Contracts)
Exit: 3700
Stop (Mental): 4500
Point Size: 12 Euro ( 3 x 4)
Estimated Return: 3000