SPX Head and Shoulders? Not So Fast!

Good Morning,

The biggie is tomorrow. Or is it? Aside from the Fed, the biggest economic calendar event is unemployment. Not only for the US, but for world markets as the USA is the big bad dude out there and all other regions follow our lead. 

BUT, and this is the first of 2 (two) BUT's today. But number 1 (one) is does unemployment matter in the face of the European bailout? And does unemployment matter in the face of massive easing on the part of world central banks?  Not too likely. 

It may though add fuel to the fire on the upside as any good news has been explosive. So if we get a print above the 100k, do we have another Friday rally? If we have a poor print, markets may break, but they will be supported as they have been by the macro easing/stimulus.

Overall, hard to say what will happen, so aside from my light equity hedge using bear call spreads and staying long the dollar (maybe) through the weekend, I am going to look for the BADABING TRADE tomorrow.

Technically, and here is the second BUT. Technically, we may have a head and shoulders forming on the SPX, BUT "technicals schmecticals" in this easing/government news driven arena.

Here is the chart, take it for what its worth:

Past performance is not indicative of future results

In forex, it was the usual, inter-market relationship driven trade, where equities weakened and the dollar strengthened and when the equities rallied, the dollar weakened. It provided an early DOUBLE FALL LINE TRADE in the NZD/USD and then found quieter, choppier ranges. I held off after that and will wait for tomorrow's excitement!!

Happy Trading and Be Environmentally Cool

Coach Brian

Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.