This Week's Trade 2/9

Going into this week I am looking to have a bullish bias from the onset. Looking at the daily chart to the left you can see we are just under that 50 day EMA. The first touch of this area this week could show some selling but I do think you gotta buy the dips here. The indicators on the chart are looking more and more bullish. The level to watch for this week is going to be 876 in the SPX. Thats the high from a few weeks back and I think if we get over 876 then we could have a green light to the 940s.

Obama and Congress will have a lot of attention this week as the bank bailout and stimulus are on everyone's mind. If they do resolve this then we are technically setup to really have a hell of a rally in the markets.

Aside from the bailout and stimulus news, we have a light week on economic data and it includes:

Tuesday- Wholesale Inventories

Wednesday- Trade Balance, Treasury Budget

Thursday- Jobless Claims, Retail Sales, Business Inventories

Friday- Michigan Sentiment

It looks like the Nasdaq wants to lead this rally if it continues. The banks are getting some hard short covering and if it continues then this market looks ready to surpass 876 this week and close in on 900 once again. On the other hand, you got to remember that the market's are running lately because they are anticipating this stimulus and bank plan to be announced. It could be a buy the rumor, sell the news type situation.

For Monday I want to buy pullbacks and see what happens. My bias is bullish but that can quickly be changed if we fail at key areas like the 850s. Trade safe.