Very good rally on very light volume

Dow was up 89, advancers over decliners 7-2 & NAZ rose 20. All this on very light NYSE volume of 0.8B. The last 5 days have been the lightest volume days in the year. All stocks I follow were in the green, very good, but light volume suggests no conviction. S&P 500 FINANCIALS INDEX rose 4½ to 275. Oil ended up 2 on threats from Gustav:

• Oil Ends Higher as Gustav Spins Toward Gulf- AP

CLV08.NYM -- Crude Oil Oct 08 -- 118.43 -- up 2.16 (1.86%)


Fannie Mae (FNM) & Freddie Mac (FRE) sold notes indicating they are healthy, to a degree. The premiums over Treasury rates keep climbing indicating investors see these as risky securities. Some think their ability for self financing means the Federal Reserve will have NOT have to come up with a rescue plan. I don't think so, watch for developments this weekend!

•Fannie, Freddie Sell $3 Billion of Debt, Suggesting Rescue Isn't Imminent


Ugly news on big mortgage mess continues. In Q2, S&L's had $14B in mortgage writedowns. They set aside 3.68% of their assets for writedowns vs just 0.38% last year. Washington Mutual, the largest in the country, is now a $3 stock.

• US Thrifts Lost $5.4B in 2Q, Second Most Ever- AP

Alerian MLP Index - 3 months

The Alerian MLP index chart for the last 3 months shows after being caught up in selling has been slugging it out, trying to climb from the recent low at 258. In the last couple of months, 275 has been a ceiling it hasn't been able to crack, now the index is making another attempt. For those interested, the 200 day moving average (at 285) is also shown. Over the last year, the index has had similar kind of short run moves but rally attempts have stalled out. The record high last year was 342. This year, it has been living under 300.