Pimp My Trade

What’s Moving in the Market Today

Posted on February 9, 2009 by Adam

I mentioned earlier that I don’t see too much being actionable as of right now. I think the market is in a wait-and-see holding pattern leading up to the bailout vote tomorrow.

I’m looking to take a reactionary response to the vote. I’m going to take my cues from the market reaction, rather than try to anticipate the direction beforehand. We’re sitting at a pretty critical level right here.

The S&P is very quiet leading up to the bailout

If we break above this resistance level, look for continued upside, perhaps up to the previous highs near 950. If we turn away from resistance here, we should see some continuation to the downside. The S&P goes on a sell signal at 815, so watch that level if the market’s reaction is bearish.

I’m not trying to predict the future here, but just to get a sense of context, the last time we passed a similar bill, the market reacted extremely bearishly. I think this situation is very different, but we could see something on par with last time at the worst. I circled the market crash that ensued last time on the chart above.