Fannie Mae-Freddie Mac rally ends

Stocks are returning to the world of reality after a wild, volatile day yesterday. Dow is down 64, decliners lead advancers 3-2 & NAZ is down 8. S&P 500 FINANCIALS INDEX pulled back 4 to 299 after yesterday's big rally. This keeps the index in its sideways trading range after the 2 day rally in mid July. An example of how quickly enthusiasm fades is yesterday Wachovia (WB) was one of the biggest bank gainers, up 2¼, being a marginal type. Today it's down 1 on a downgrade. Beware of gut reaction rallies.

Ahead of the Bell: Merrill downgrades Wachovia


Oil is gaining interest between worries about the hurricane and the OPEC meeting in Vienna. It looks like the meeting will not call for a production cut, sending oil prices lower. If it continues & closes in the 104s, the will be a significant breach in its prices for day traders. Also, early signals are that the hurricane will not cause a lot of damage to oil equipment in the Gulf.

•Oil Declines as Saudi, Venezuelan Comments Signal OPEC to Maintain Output
•Hurricane Ike Moving Over Cuba, May Intensify, Spare Gulf Oil Production

CLV08.NYM

.. Crude Oil Oct 08

... 104.26

... 2.08 (1.96%)

The Alerian MLP index is having a very bad day indicating tougher times ahead for pipelines:

^AMZ

254.08

6.28

2.41%

Alerian MLP Index -- 3 years




The chart shows the index may be settling into a flat range where it was 3 years ago. I like the business and just had an article published at SeekingAlpha:

http://seekingalpha.com/article/94022-why-buy-mlps

This is a good time to read & learn in preparation for future investments.