Overnight, it appears that stock index futures traders have lost their enthusiasm for the AIG bail-out, losing their nerve and selling of the stock index futures. As I have mentioned regarding past bail-outs, the excitement is usually only temporary. Eventually, within days or even a few hours (as in this case), investors begin to realize that the crisis continues and that this was not a genuine, lasting solution. Then, the sentiment quickly returns to where it had been previously. We should be prepared today for another volatile day trading stock market futures.Also, yesterday, the Dow futures hit a new low for 2008. I had noticed it but failed to mention it until now because the Dow rallied off the new low so forcefully.
