Pre Market - October 6, 2008

Posted: October 6, 2008 at 9:22 am by Chuck

The S&P futures continue to fight with support levels around the 1077 area. We are anticipating a very bizarre trading day today. All eyes will be on the support levels.

As I mentioned last night it is possible that we see a bounce of the support level, but the long term view remains negative. If support levels fail with strong volume then we could be looking at a very significant sell off today. The charts posted last evening are important to keep handy in order to know where the major support/resistance levels are.

European markets are significantly lower this morning. US Treasury announces an expansion to the lending facilities.

FED BOOSTING TAF LIQUIDITY AUCTIONS TO $150B EACH; ALSO INITIATING PLAN TO PAY INTEREST ON BANK BALANCES

- Fed and Treasury are considering ways to boost term unsecured funding markets as well. Fed pledges to raise money market liquidity as needed.
- Fed will allow limited bank purchases of assets from money market mutual funds.
- Fed will pay interest on banks’ excess reserve balances.
- The TAF increases begin with Monday’s auctions, notes the increased payments will provide greater scope to the programs