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Hindsight is always crystal clear. Much like last Thursday, today’s gap up open was again one that should have been sold. I sold my long position in China (CAF), and shorted Korea (EWY) into that strength. Now I am long America (SPY) and net short Asia (IFN, EWY).

Now that the Treasury, Fed and FDIC have made their official “US Banking System” statement, all the market has left to trade on is noise. And from the Slum Dog Short Sellers to the manic media, there is plenty of it.

My proactive risk management plan is moving squarely to the Tuesday-Thursday Macro calendar catalysts where whatever leadership we have left in this country’s Financial System will have an open mike to be You Tubed by both the American public and global markets at large:

1. Obama gets his shot herding cats again in speaking to Congress
2. Bernanke will attempt to calm the Senate re today’s “Banking System Statement”
3. Case/Shiller House Prices will be horrendous (lagging economic indicator)

1. Bernanke gets his shot with the House, explaining today’s “Banking System Statement” again
2. Existing Home Sales for January are released (December’s number was better than expected)
3. Earnings season for US Retailers will continue to be as bad as expected

1. Obama’s 1st Budget is release, and he’ll have another chance to herd cats/calm the country
2. New Home Sales (January) are released
3. Jaime Dimon will attempt to find credibility at JPM’s Investor Day

Importantly, the US Government’s CAP (Capital Assistance Program) will be initiated on Wednesday – so there is plenty for Bernanke to be specific about. This market wants specifics. In addition to this CAP plan, I expect Bernanke to start walking the media’s manic horses to water on what TALF (term auction lending facility) means, how much of that capital that the government has started to put to work, etc…

In between now and Thursday, America’s largest banks will continue to go through Geithner’s proposed “Stress Tests” and, all the while, the groupthink associated with a freaked out US market crowd will find their price marking another capitulation bottom. Provided that the VIX stays tucked under the bearish intermediate Trend line of 52.59, my stress levels will hopefully remain relatively low.

Keith R. McCullough
CEO & Chief Investment Officer