The financial world will turns its eyes and ears toward Jackson Hole, Wyoming tomorrow. Federal Reserve chairman Ben Bernanke will share his speech on the "Near- and Long-term Prospects for the U.S. Economy", which begins at 10:00 a.m. ET tomorrow. Most analysts are not expecting Bernanke to announce QE3 but he could announce some other sort of stimulus or hint at some other policy moves to help stimulate the struggling U.S. economy.
If Bernanke does not soothe the markets then stocks could see another sharp sell-off. I would anticipate the market to be quiet and trade sideways up to the ten o'clock hour but Friday morning probably depends on how Europe's markets are doing. Day traders may want to consider some sort of market neutral strategy (like a straddle or a strangle) at 10:00 a.m. ET tomorrow to catch any post-speech volatility.
We are not adding any new plays tonight. There is no way to predict what direction stocks might move on Bernanke's comments. We could rally or stocks could see a sell-the-news sort of move even if he offers some sort of stimulus.
I suspect that stocks could see another dip toward their recent lows. Here's a small list of stocks I'm watching for potential entry points:
AXP, TTC, LZB, LIZ, FMCN, HEI, and STMP.