No deal for Yahoo Merger with Microsoft

5/5/08

Jerry Yang refuse with Microsoft $33 dollar bid merger deal over the weekend. Market is lack of this good news and sell off slightly. All major indexes are closing in negative territory. Especially, S&P and Dow have formed three day bearish candlestick pattern ( Evening Star ) while Stoc. is in overbrought zone, Macd seems to form sell signal with the trend ended below 200 simple moving average. Technically, it is not a good sign and market seems lack of good news to breakout higher. Tomorrow would be worth to watch to see if this rally has ended here.( expect market going sideway from now). There has news regard that BAC may lower bid of CFC into $2 or withdraw the whole deal because the CFC mortgage assets has been deteriorated ( full of garbage ). Also, the Fed has increase the offer of TAF over the weekend. This means to me that the preivous TAF is not working out since all banks have strong desire. Moreover, if the preivous TAF is easing the crisis, the bank should able to trade with counterparties with confidence. Why banks still want more from Fed?? It seems like a person is using a credit card with preset limit. Now, it got offer to extend the credit line. Does this action would help the person habit not over use the credit? I do not know but the time would tell. Overall, consider the risk and reward ratio, it is not wise to long anything right this moment. Remember, trade with short term is always good with proper trading plan. Period of month May to November consider bearish for market ( year 06' it is going downward, 07' of course the sub-prime crisis ), Let see how market would turn out this summer.