ENERGIES
The release of liquidity into the markets is encouraging traders to think a severe global economic slowdown may be averted. This is leading to profit-taking in the December crude oil market which had been selling off hard in anticipation of a slowdown in demand. Look for a strong short-covering rally today. If momentum can build, this market may have enough to rally back to $90 over the short-run.

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FINANCIALS
The December Bonds and December Treasury Notes traded mostly higher during the overnight session in a flight-to-quality rally as stock markets around the world posted massive losses. Late in the trading session bond and notes broke and are now negative before the opening. This may be an indication that the credit markets are loosening. At the time the major issue is still establishing confidence and trust in the banking system. It is getting to the point where something has to be done to almost force banks to do business. It seems all the banks want to do is use taxpayer money to build then protect their capital. They are obviously not putting to work the money the Fed and the Treasury have made available to them. Until the banks start to act like banks look for the possibility of more flight-to-quality rallies throughout the day if the equity markets cannot recover from their lows.

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ENERGIES
December Crude Oil continues to collapse as the world is heading toward an economic slowdown. Several countries are posting reports which indicate that they are already experiencing recessions. This news should continue to put downside pressure on crude oil as demand is expected to fall. The longer-term charts are signaling the possibility of a break to $72. Look for $90 to become resistance.

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FINANCIALS
The global interest rate cuts of 50 basis points did nothing to free up the log jam in the credit markets. LIBOR rates remain tight. The U.S. is looking for help as it looks as if the $700 billion banking rescue package is not going to work without global cooperation.

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