Despite passage of the U.S. financial bailout bill futures are tanking
Despite passage of the U.S. financial bailout bill by the U.S. Senate, it appears worries about its fate in the House of Representatives at the end of the week are the driving factor behind a nightly selloff in ES, (SP500 Futures) NQ, (NASDAQ Futures) and, YM (DOW Futures.)
YM (DOW Futures) has now had a nearly 200 point swing down from the highs, and YM in terms of percent is actually holding up the best. NASDAQ futures are down the most but not far behind we have SP500 futures that have had nearly a 20 point swing down from the highs which happened within minutes of the Senate vote decision.
With futures being far worse right now than they were Sunday evening before the Congress decision, tomorrow appears to be in for a very bumpy ride. As I type this they continue to accelerate to the downside dragging down both the Nikkei and Hang Seng.
Although this type of late evening volatility isn't unprecedented it's typically never a good sign for the following trading day if anyone was looking to play a rally in hopes the Senate would come back with the all clear.
This still has to get through the house and the way it looks now, that might not even happen until Friday at the earliest. Then you have to consider what if it's not until the weekend or next week? Does anyone want to hold long over the weekend knowing what just happened this past Monday when the DOW tanked 770+ points for those that bought last Friday trying to play the Congress bounce that never came?
Uncertainty might have lifted as far as the Senate goes but it sure doesn't mean that yesterdays rally wasn't a "Buy the Rumor" and tomorrow turns into a "Sell the Fact".
Time will tell
Targets still look like according to the Descending Triangle Chart Pattern
DOW 9,800 (which is another 1,000 points down)
SP500 1,070
NASDAQ 1860
To review that pattern you can click here
Your advice/recommendations for the past few months have been extremely valuable. Keep up the great work, especially the option trades.
Marilyn
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I sincerely Thank you.
Frank J
John,
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Mike
Thanks JL,
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best wishes
netptc
