Remember that the stop is being placed loosely, and I view the trade as a portfolio hedge. The same goes for the HSBC Holdings (NYSE: HBC) short, which new readers still have time to enter.

Market sentiment remains in the cellar, and I’m reiterating last week’s commentary on nationalizing mortgages. The Federal Reserve’s latest effort to inject liquidity in the interbank market–the loans will be collateralized by the weakest assets–is clear evidence that American policymakers are one step closer to this trend.

The US central bank will continue to cut rates aggressively in an effort to support a weakening economy. The European Central Bank, the Swiss National Bank and the Bank of Canada have also pledged to boost liquidity. And with a rare full-point Fed rate cut expected tomorrow, the markets should react accordingly with a rally. But until we see a prolonged upswing, pessimism reigns supreme.