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inthemoneystock (< 20)

Financial Stocks Hold The Cards



July 18, 2011 – Comments (1) | RELATED TICKERS: XLF , MS , BAC

This morning, all of the major financial stocks are declining lower. This sector has lead the markets lower throughout the trading year. Stocks such as Bank of America Corp.(NYSE:BAC), and Morgan Stanley(NYSE:MS) are making new 52 week lows this morning. Other leading financial stocks such as Goldman Sachs Group Inc.(NYSE:GS), J.P. Morgan Chase & Co.(NYSE:JPM), and Citigroup Inc(NYSE:C), are trading near their lows for the year.

Should the financial stocks catch a bid or trade higher throughout the day the major stock indexes could reverse the early declines and rally higher. At this time, the financial sector is holding the cards in this stock market. The Financial Select SPDR Fund(NYSE:XLF) will have intra-day support around $14.72, and the $14.60 levels.

Nicholas Santiago

1 Comments – Post Your Own

#1) On July 18, 2011 at 12:11 PM, davejh23 (< 20) wrote:

It certainly looks like the broader market is going to follow the path of the financials.  Financials have been in a downward trend for almost 6 months now, falling more than 15%.  Death cross on financials happened in late June, right before financials rallied and failed to break above the 200 day average before falling again.

The downtrend in small caps that started in late April was broken when they rallied through the second half of June...they're now down ~6%, and daily, weekly, and monthly charts look bearish.  I'd bet that small caps make new lows in the next month.

Similar story for the S&P.  Down < 5% from the late April high, but short and longer term technicals do not look good.  Another 2% loss and we're looking at no gains for FY'11 more than half way through the year.  We're also looking at a death cross in the next month or so if stocks don't hold on here. 

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