FINANCIALS
The December Treasury Bonds and December Treasury Notes are experiencing a short-covering rally overnight. After several days down, traders feel the short-term move has been over done. This current rally will be very important to the trend. Expectations are for this market to rally back at least 50% of the last break. If sellers step in a secondary lower top will be made and the market will begin to look like it’s topping. For months the treasuries have been strong because of flight to quality buying. Now that the Fed and Treasury are attempting to rescue the banking industry the budget deficit is expected to soar. This may mean higher interest rates in order to finance this debt. If the resolution to rescue the financial industry passes into law on Friday then look for the downtrend to resume. Continue to watch for short-covering for one to two days or until these markets reach retracement zones. Look to be a seller on this rally.

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ENERGIES
December Crude Oil has traded sharply higher over the past week as more money is flowing into commodities. Traders are treating this market as a hedge against uncertainty in the U.S. financial markets. Continue to look for higher markets.

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One of my favourite movie lines in years came from Daniel Day Lewis in the movie "There Will Be Blood":

"Imagine..." his character said: "that I have a very long straw now. And I take my straw and I put it in your milk shake. And I drink your milk shake".

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