On September 4th, Wilbur Ross said that he expected 500 more banks to fail
between then and the end of 2010.
This morning, economist Nouriel Roubini told CNBC that he was predicting that "more
than 1,000 financial institutions could fail before all is said and done".
Ross's prediction comes out to an average of 1.04 banks failing per day between
Sept. 9th. and December 31st. of 2010. Roubini doesn't give any dates, but
he doubles the expected number.
What does that mean?
It will mean a down condition on the Banking Index, and a shorting opportunity
on the XLF (ETF).
So, this morning we will look at the Banking Index ($BKX). This should be
a BIG testing day for the Banking Index based on our chart from last Friday's
close.
Note, that besides testing the support line, that the Banking Index is forming
a Head & Shoulders pattern with high-odds downside implications if we cannot
hold this support level. Our Super Accelerator's S.T. Indicator just went negative,
so the bias is leaning to the downside. (The Banking Index is updated daily
on our Advanced Investor web pages.)
Marty Chenard is an Advanced Stock Market Technical Analyst that has developed
his own proprietary analytical tools and stock market models. As a result,
he was out of the market two weeks before the 1987 Crash in the most recent
Bear Market he faxed his Members in March 2000 telling them all to SELL. He
is an advanced technical analyst and not an investment advisor, nor a securities
broker.
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