Charts: The S&P 500 had a strong day, up 1.5% to close at 1088. The correction is at an inflection point. Lows for the year are 1057. These levels have been probed a couple times now. If the index breaks through these lows it could spell the start of a bear market. If support holds, as it did today, the charts are saying we are only in a correction.
Fundamentals: Germany passed the trillion dollar bailout package for Euro-periphery debt last night. Germany’s bizarre restriction on shorting Euro-debt was a Hail Mary to try and avoid funding the bailout. The Hail Mary didn’t work but the bailout won’t work without Germany’s head in the game. The US Senate passed its financial reform bill. Now the House and Senate will merge their respective bills. The House version exempts car dealers from financial restrictions and the final bill may keep this exemption. If this were to happen it would be a sign that the government’s attack on the private sector is losing steam.
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