With the market closed today because of President's Day tomorrow is setting up to be an interesting session. The big news tomorrow surrounds the auto makers as their viability plans becomes due. Will the markets reaction set the tone for the week?
What we do know for sure is that the S&P 500 is trading in a fairly tight channel between 800 and 880. The index has struggled to break through its 50 day moving average which we highlighted in last week's post, November lows next? A fall below 800 will spell disaster for the Financials and the rest of the market.
Why? because with this key support broken momentum will almost certainly send the index down to its November 08 lows. Chart below.
For investors betting on the bear winning the way to maximize profits is buy holding shares of the Ultra Short Financials ETF (SKF). This volatile exchange traded fund will surely be a big winner if we fall under 800 this week...