Despite the rally in the general market several banking stocks were substantially lower, with BAC/BCS/C/WFC/JPM the biggest losers. As mentioned over the last few months/weeks, Citi and Barclays are in trouble, and in the past few weeks Bank of America has joined them. The other two mentioned above are still relatively sound. This week the banking sector KBE and the financials XLF entered downtrends. This does not bode well for the market overall.
Since OEW has not yet confirmed a trend reversal we're caught in the middle, and the charts of the SPX/DOW reflect that. The SPX charts display that the uptrend is still underway, but the DOW charts display that Intermediate wave 4 probably concluded at the recent highs and the market will confirm a downtrend soon. Technically, the recent selloff from SPX 944 to 817 looks like a typical first wave of a downtrend. It never had an intraday rally of more than 13 points, until yesterdays low. Should this be the correct interpretation the market should continue to rally but run into trouble around the SPX 880 level. Should the uptrend still be in force, a push over SPX 900 would be required in the first few days of the week to regain upside momentum. Suggest one trade accordingly. Today the market closed above the pivot at SPX 848, which is a positive sign, for now. Best to your weekend! MEDIUM TERM: uptrend in jeopardy LONG TERM: bear market
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