SPY(S&P500 ETF) has formed an Apex. This is a bearish formation, but until SPY would not tank to 106 ,I cannot say for sure if SPY is going lower or not. Quick reminder on S&P500, it could break the downtrend channel today, that consider very bullish. We have apex formation and channel break out, we have to wait to see which one will be the play next week. Meanwhile pay attention to 1100 level. S&P500 must close above it by Friday July 23rd.
On the fundamental aspect, we are going to get the Europe's banks stress tests tomorrow. About 91 lenders from 20 countries have faced the so-called stress tests and the results are due 07/23/2010 at 12:00PM EST. If you think they are going to announce to the world “We have bad news, banks A, B and C are poorly capitalized...” You are out of your mind. Obviously they will give bankers the free pass, as the U.S. did to our insolvent banks. Therefore there is a good chance that big institutions are positioning for good news that would explain these whipsaw moves in stock market. The Europe's banks stress tests result could already priced in. I cannot say what is going to play out tomorrow, that's anybody's guess. I will seat on the cash and wait for the dust to saddle.
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