Sunday, February 22, 2009

The Weekly Trade 2/23

For this week I am slightly more bullish and expecting a snapback rally of some sort to begin things. News out Sunday that Citi wants the gov't to take a stake has the futures rallying but don't fall in love with the upside. Looking at the chart of the SPX lately we are oversold on the RSI and stochastics and have been riding the lower bollinger band the last few days. This coincides with the lows from November coming into play now and it is likely we see a relief rally becuase of all these factors coming into play. I would not be surprised if we retrace back into the 20 day ema, which sits around 824 currently.

I still think the intermediate term trend is lower and if we don't get this bounce then we def could break those November lows quickly. But at this time I think the charts are pointing to at least a small retracement of the prior decline.

Economic data for this week includes:

Tuesday- Case Shiller Home Price Index, Consumer Confidence, Bernanke Monetary Report
Wednesday- Existing Home Sales
Thursday- Durable Goods Orders, Jobless Claims, New Home Sales
Friday- Q4 GDP-Prel., Chicago PMI, Michigan Sentiment

As for Monday, the pivot point is at 766.75 and the futures are up in the 780 area currently. I think we are gonna see some short covering as long as we stay over the pivot on Monday. There is lots of news coming out intraday lately so its been choppy and violent. Below that pivot area and I think the market will be in trouble so add to shorts below that level.

Overall, I will start off neutral to bullishly biased this week but that can change at any time as I'm sure plenty of news will be coming out. I also plan to start posting individual option trading ideas soon so look for that addition to the daily blogging. Trade safe.

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