Geithner/Paulson On The Hot Seat

Given the grilling that Treasury Secretary Geithner is getting in front of Congress today, and Paulson will follow, I think it is extremely difficult to expect stocks to rally today. Tonight we will hear Obama's State of the Union, which I'm sure will carry more anti-business overtones in it, even as he tries to push for jobs. Real estate mogul Sam Zell recently said at a conference that it is foolish to believe that Main Street can continue to recover without Wall Street.

Watching these testimonies is frustrating in the sense that the Congressmen are the ultimate Monday morning quarterbacks, second guessing every decision with the benefit of hindsight. I guess they weren't sitting in front of their quote screens back in Sept. 08 when stocks like Morgan Stanley (MS) fell -40% in a single morning for no concrete reason other that the sheer panic that was taking over. I fully understood no solution would be perfect, but anything that renewed calm in the markets had to be better than the alternative (doing nothing).

Now that I got that little rant off my chest, we also have a Fed meeting today, with an announcement on rates/monetary policy later today. Today is also the much heralded Apple (AAPL) event where they are expected to announced their new tablet device.

The dollar is mixed today, but commodities and materials stocks are weak. Oil is near $74.75 and gold is slightly lower to $1091.

Asian markets were lower overnight amid continuing worries over tighter monetary policy in China.

The 10-yr yield is lower to 3.60%, and the VIX is slightly higher to 24.63.

Trading comment: Bearish sentiment continues to grow, a necessary ingredient for a market bottom. Yesterday, the ISEE call/put ratio made a 52-wk low at 67. Today, Investor's Intelligence survey showed that the % of investors expecting a 10% correction hit its highest level (36.7%) since November 1986 - almost 25 yrs!

I continue to think that we could see an oversold bounce shortly, but then the market could come back down at some point in Feb., offering a better entry point for investors.

long AAPL