OK, the Fed held steady today on the Fed Funds rate, but they dumped an additional $50B into the banking system reserves (which follows the historically significant $70B they already shot into the system Monday). Then after the close announced they will indeed bridge AIG an emergency loan to the tune of $85B.
I covered anything left short at today's open, picked-up my rubber band woot suit from the cleaners and started buying long ~90 minutes into the session. By the time the market started driving higher with about 90 minutes left I was fatter than Brando and running like God. I sold my larger index trades into the rip higher, but I held several names long going into tomorrow; un-hedged.
I would expect a bit of follow-through tomorrow, and perhaps a sharp advance, but if it is dramatic I'm just selling into strength. If the advance is more casual (which will tend to have a bit more staying power), we might get a few days to a couple weeks of a firm market, but a re-test of sorts should eventually be expected.
So a strategy of selling emotional spikes higher and buying emotional dips lower is the gameplan here for the time being.
If we manage a successful re-test, or mark a bottom in another fashion (to be defined later), then I would actually move back to managing portfolios for a living; instead of reverting to this late-90's style daytrading (it was fun while it lasted at least).
If we don't manage a successful retest, but drive to lower-lows instead - I will get aggressively short and forget about getting flat by the close any longer. They'll be no way to be short enough should that develop.