Banks And Oil Keep Market From Collapsing
After early strong gains, the stock markets started to sell. This was driven by a stronger Dollar in late morning trading and continued fear from Europe. The markets are hovering in a range over the last three trading days. This is known as consolidation and bullish as long as the pattern does not break dramatically to the downside. The level on the SPDR S&P 500 ETF (NYSE:SPY) that must hold is $117.00.
The banks and oil plays are still hovering on the positive side today. The banks have been the weakest sector over the last six months and are clinging to a minor technical bounce. With the markets lower across the board, Bank of America Corp (NYSE:BAC) is trading at $7.42, +0.02 (+0.27%) and Wells Fargo & Company (NYSE:WFC) is trading $24.62, +0.07 (+0.29%). Oil stocks continue to be generally higher even with a lower market. This is on the back of a recent big bounce in oil and even today, the energy source is slightly higher. There is talk of continued global printing of money. As long as this happens, all commodities should see a rise. Exxon Mobil Corporation (NYSE:XOM) is trading at $73.66, +0.16 (+0.22%).
Investors remain very nervous. Right now the charts are signaling continued consolidation and then another move higher towards the $125.00 level on the SPY. That view will hold true unless the $117.00 level is taken out.