Ambac

Sold my TWM on Friday at $85.71. Haven't sold my FXP and only saw it plummeted back to $88 decimal......

The rumours about bailout of Ambac hit the market late Friday, causing my FXP to decline sharply and fast. Will the insurer be saved I don't know, but market took it as good news and rally. Will this rally last? Still need to check. So far what I saw is the following after market closed on Friday:

1. Many other banks and brokerages reacted to the news as well, but not any one I saw did really break any significant moving average resistents.

2. Ambac itself's volume was not very high. Given the rumours came out on a Friday afternnoon and if that made the shorts very nervous, I expected more volume than that. As well, it didn't push the price above the 20-day EMA.

3. Some stocks are already at or below their January lows. For example, FRE, FNM, LEH. Even worse were among tech stocks like AAPL, GOOG, AMZN, DELL and EBAY.

The bailout of an insurer may help, but I doubt it will help the whole economy. By Monday we should have a better idea of how people react to the news. People believe gap up in Ambac and up in global market are already in the pocket. A more detail analysis should be needed before you think the market is now clear.