Down for the Banking Index?
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.)