This week will be critical

This week will be critical for the markets. As planned, I did not go overboard with any new long positions after the Fed cut. The main reason is the way QQQQ is hanging in the area between the upper trendline and lower dotted line. I am not sure how long it can stay in this area. On Friday it set an hammer and the close of the hammer was right at upper trendline. This is again resistance for the market. QQQQ is a good proxy for the market as seen by the fact that big-cap techs are leading the market.

A few hours back, Charles Prince announced his resignation from the helm at Citibank. There was a lot of angst among investors to oust Prince. So, this will be a welcome news to those investors. The critical point here is the massive writedowns of $ 8 billion to $11 billion. This is much more than the initially announced $2.2 billion during third quarter earnings. Citigroup earnings were already down 57% from last year. This tells you how bad the subprime mortgage mess is and we are still unearthing new dangers. Best is to stay away from any finanical banks that have sub-prime exposure. We lost two CEOs in a week....what is next ?