Congress, can't live with them and we can't sue them. How about putting a few of them in jail, is that possible given the mess they have put us in?
Let's think about what can happen if they pass the bill for the "rescue" package. The first thing that will happen is that they will come up with a softer name that will not scare the general public. After that, confidence and fear will push and pull the markets.
Let's look at the market in the belief that they pass the bill. What will happen the next trading day? What happens is going to be very important as to which direction the market heads. If the market opens lower after they pass the bill, watch out. It won't be a pretty day and panic will be sure to set in. If the market opens sharply higher and sells off later in the day, it's not going to instill confidence in the system.
What I'm looking at is how the market closes this Friday. Does it close higher for the week, or does it close lower for the week? Another key will be what are traders comfortable going home with this weekend. You may want to watch the dollar index and gold and see where they are closing for the week as they typically foreshadow things to come for the economy as a whole.
If Congress and the Senate continues to play politics and do not pass this bill for the markets, we are going to see a pullback and a retest of the lows. Again, I can not stress enough the importance of how the indexes close this weekend. I doubt I am the only one who thinks that these guys are incapable of cleaning up this issue given that they made the mess to start with.
Our "Trade Triangle" technology continues to remain in a negative position and we see nothing in the short term that's going to change the trend of the US economy and the stock indexes that we are following.
For your information the Dow closed at 11,143.13 last week. NASDAQ closed at 2183.34 and the S&P closed at 1213.01.
Again, I stress that I want to see how these markets close for the week and not only how they close the day after the announcement is made.
Our blog poll for traders has always been very accurate over time. Many traders, in this case 67%, are negative on the stock market for the balance of the year. I would not dismiss this poll as it has been extremely accurate in the past in predicting gold, crude oil, and other markets.
We are living in tumultuous times and these times demand strict discipline in the one's trading.
Round three begins Thursday morning.
Good luck to everyone,