The stock market closed down sharply (again) as investors continue to focus on liquidity problems brought on by the unwinding of CDO mortgages, and get this, even the good mortgages. Wasn't it just a few short weeks ago that we were told (by financial tv) that the subprime mess was a small issue and not to worry?

So much for their credibility.

Not to worry though, the calvary has come to town. The calvary I am speaking of is;

1) European Central Bank (ECB), which pumped €155.85 billion ($214.56B) into the system last week, and another €47.5 billion ($65 billion) on Monday.

2) The Bank of Japan with $5 billion.

3) U.S. Federal Reserve with $59 billion.

When will these guys run out of money? When they run out of ink!

They beauty of this bailout is that central bankers can inject money into the banking system without having to lower short-term interest rates.

If you currently own any of our recommended market hedges, we suggest that you take your profits on those positions this week. They are the inverse funds on the S&P (SDS), Dow 30 (DXD), and the Nasdaq (QID).

For those of you who would like to play the markets eventual recovery, you may want to consider some of these supercharged bull funds by ProShares; S&P (SSO), Dow 30 (DDM), and Nasdaq (QLD).

Previously I said I would only buys these when the S&P breaks below 1400, or the Dow reaches the 13,000-12,800 level. I think it's fine to start buying the above funds at current levels.

My downside target for the current correction remains around the 12,800 level. I never wait on "the bottom" before re-entering the market. Of course, dollar cost averaging in is the best way to build positions in your portfolio. Now that the central bankers have injected liquidity into the financial system, the odds of a greater than 10% correction seem remote.

The most attractive sectors for value investors are the financials, energy, homebuilders, REIT's, and select retailers. Many high quality bank stocks are now sporting dividend yields of 5-6%.