Tuesday, April 28, 2009

Important "Stress Test" for market comming up here

Just tonight news was leaked from regulators (according to WSJ) that BAC and C will need to raise capital as per stress test results. This along with increased spreading of swine flu has tanked the futures by about 1.3%. It is really a suprise that these 2 banks (especially C) will need to raise more capitial? I don't think it is.... but as of now the futures are deep in the red, so let's see how this market can handle bad news comming off an overbought condition partially worked off thus far. If this rally is still in tact, then it should not breach 825 on the S&P. That would be a maximum downside target for any "pullback" that would still, in my opinion, keep this rally in tact. I don't think it gets that's deep but I'm preparing myself for anything. It also goes to show you that holding positions overnight can be dangerous due to after hours headline risk. I might get a chance to reload on the VIX puts I sold last week as well as the TBT calls I sold if I see action that I like.

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