The Wild Card

Commodities are trying to rally this morning while the dollar is lower. The risk trade is trying to reassert itself, dragging the futures higher. I believe the market is more likely to go down between now and option expiration. However, that does not preclude some up days.

Wells Fargo and Citigroup are both in negotiations with the government to get out of TARP. If either succeeds it will lead to a large equity offering. I don't believe the market could handle another large offering and the downside could be large if an agreement is reached. That is the wild card for the coming week. If an agreement is not announced by next week than the market is likely safe from the equity offerings until after earnings.

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