NYA Pivot Range

It receded all the way back to the weekly pivot range ( 8277-8395) today. There are concerns that WaMu, Bill Nygren favorite for many years, is unable to attract unsecured credit and may see a run on its deposit base. The NYA closed at 8369.91 which is still a bit above the mid pivot at 8335. We could get a bounce off the pivot range here, but a close below 8277 in another negative dished out by this market. If that happens this week's rise will turn out to be nothing more than a very short lived, and vicious, sucker rally.

I saw an interesting note from Morningstar yesterday. According to their research director, "banks with strong balance sheets like WFC, JPM, USB, HCBK are printing money because they have capital to lend while others don't. The poorly capitalized banks need to keep their capital on their balance sheets to meet regulatory requirements and prevent against future losses".

I think that a good place to look for long trades in a rally are in the rock solid banks. They all are not going to implode as appears to be the case with the WaMus of the world.