Credit Market Losses,worst is over.

Goldman Sachs Group Inc. and Bank of America Corp. stoked optimism that the nation's largest banks may have seen the worst of credit market losses.

Credit default swaps have improved.http://en.wikipedia.org/wiki/Credit_default_swap
Goldman Sachs Chief Executive Officer Lloyd Blankfein told a New York conference yesterday that the largest U.S. securities firm by market value doesn't plan ``significant'' writedowns from subprime-mortgage securities. Bank of America said its losses will be restricted to $3 billion next quarter and UBS AG analyst Glenn Schorr said the potential for losses at Lehman Brothers Holdings Inc. is ``negligible.''

What a sigh of relief after a whole week of sell-off.It's again the big boys who dictate the terms of where the financial markets should head.This is also amounting to rigging the markets.

Citigroup and Merrill Lynch, both based in New York, sparked a selloff of financial shares and debt this month when the firms accepted the resignation of their CEOs and increased writedowns of collateralized debt obligations and other debt backed by mortgages to people with poor credit.

Credit-default swaps tied to the bonds of the world's biggest banks and securities firms soared to the highest last week. Citigroup said it may take an additional $11 billion of writedowns on top of $5.9 billion and Merrill, the world's third-biggest securities firm, increased its losses to $8.4 billion.

There is so much negativity, so much bearishiness priced in, it's not surprising that the market takes a breather, consolidates and re-evaluates.It's a relief rally for the Dow yesterday.

Credit-default swaps, contracts conceived to protect bondholders against nonpayment, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.

Tracking the Dow on Tuesday13/11/07

The bulls went on a stampede at the opening bell with about a 100 points spike.Thereafter it went through a distribution phase.The speed at the opening race will make it exhausted.
At the closing bell,the candlestick was a bearish top signalling profit-taking will be in command in the following session.
The rally was a sign of relief but can it be a short-covering and couldn't sustain?The candlestick have a shaven bottom and top.Somehow or rather it will pullback to its pivot point before it continue its advancing pace.

Time for rebound!

Dow Index futures will be starting their roll-overs before the contract expires on 16/11/07.http://www.answers.com/topic/rollover.Traders will be starting to cover all their short positions and the market is poised to move northward.Normally the activities start 8days before expiry.That's where they have "SELL HIGH and BUY LOW" principles.The subprime rout and yen carry trade are actually old news since May'07 and best kept secret by the market-makers to use as a tool to bring down a market at the right time.Those instituitions release their full scale report at this time of the year just in time for the annual window dressing before they unwind and go for their Thanksgiving Holiday.What a great pre-emptive strike!

Tracking the Dow on Monday 12/11/07

The opening was a "Dragonfly Doji" planning to fly higher.There were many bullish white candlestick depicting the advancing strength.The last hour of trading saw heavy profit taking by daytraders and ended with an "inverted hammer".There were no long shadows beneath it,so a spillover bullish trend is intact.

Will these pair of candlestick,the so called "morning star" transform into a bullish recovery.Looks like it will so as to form the next right shoulder of the Dow.