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Watch Out for the Day Traders at the Fed

We learned yesterday that not only does the Obama administration watch the stock market carefully, it also has a technical analyst on board. We were exactly at a crucial support point on the charts when the Treasury leaked the home mortgage subsidy plan, triggering a short covering rally in the Dow. A couple of points lower, and a deluge of stop loss sales would have been triggered, taking the market down 500. The message from the Feds is that if you want to play on the short side here, do so at your own peril. Suddenly, running a hedge fund has become harder, as if we didn’t have enough on our plate already.