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Stock Markets Up But Watch This Big Factor



November 29, 2011 – Comments (0) | RELATED TICKERS: SPY , GS , JPM

The week prior to Thanksgiving was the worst since 1932. This gives perspective on what truly is going on in the market. While the average investor was in panic mode and even institutions were lost in the horror of the market, we were slowly accumulating long position. Those long positions are paying huge profits this week as the markets have bounced sharply higher. The bounce is continuing today as the SPDR S&P 500 ETF (NYSEARCA:SPY)  is trading at $120.28, +0.58 (+0.48%).

While the upside may last a little longer, storm clouds continue to lurk on the horizon. The biggest worry for the markets must be the performance of the financial sector. This sector is directly related to the issues in Europe and a great leading indicator. Yesterday, as the markets surged 3%, financial stocks like Goldman Sachs Group, Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM), Morgan Stanley (NYSE:MS) and Citigroup Inc. (NYSE:C)  all started out sharply higher and collapsed. They ended the day with barely any gains. Today again, financial stocks like JPMorgan Chase are lower on the day. JPMorgan is trading at $28.76, -0.40 (-1.37%) .

As long as the financial stocks remain this weak, the recent two day rally may be short lived. Should the financial stocks gain traction and start leading the market, the rally will last through the end of the year. Be alert as so far the banks are weak.

Gareth Soloway

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