There’s not much to do now except wait for the market’s reaction to what Obama has to say tonight and what Geithner reveals tomorrow at 11 AM. I almost don’t want to mention the technicals given that we should be driven by the news everybody’s been waiting for. But I do see many setups (NR7s, spinning tops, harami…) that I’d normally be licking my chops to short. If I do enter any shorts tomorrow it won’t be until after Geithner starts speaking and then only if we trade below today’s lows. I show a couple of setups on the indices below. Normally I prefer to trade the Nasdaq (QQQQ) over the S&P but for a short here I like the S&P (SPY) much better. It’s got worse relative strength, is bumping up against its 50-day moving average and would likely suffer more due to a bad reaction to the government’s plans since it’s composed of so many financial stocks. I’ll also be locked in on XLF.
It’s also worth noting that the Nasdaq is at its upper Bollinger Band (not shown).
no changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Down | Down | Down |
| Intermediate | Up | Lat | Lat |
| Short-term | Up | Up | Up |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
