In the last recap I did before leaving in December I pointed out the huge gains the financials were enjoying then. But I also pointed out that they were still in clear downtrends and that the BKX had resistance in the high 40s. So I guess it's fitting that on my first day back the financials stunk up the joint. The BKX stalled around 45 in early January and has been sliding ever since. It took out its 2008 low last week and is now basically in free-fall.
It's no wonder that the banking index looks so bad when one looks at some individual banks. I'll use Bank of America (BAC) as an example. Here's a long term chart showing that its now about 90% off of its highs and down 64% just in January. Just like that it's back to 1991 levels! The bulls can only hope that the financials don't drag the rest of the market into the abyss...
I don't like to put much emphasis on technicals in the heart of earnings season but things are looking quite bearish for the indices. I see no technical reason to be long yet. An obvious scenario is for the November lows to be retested and for bulls to try to create a double bottom there.
The VIX is back in the stratosphere...
Everything is down again!
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Down | Down | Down |
| Intermediate | Down(-) | Down | Down(-) |
| Short-term | Down | Down | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I'm simply using the indices' relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
Let me be one of the first to welcome you back! You've missed quite a bit of insanity. Also, not sure if you are regularly on stocktwits.com, but that seems to have exploded in the last month. I'm using it quite regularly now since you talked about it in one of your blogs a while back.
welcome back!
Holy smokes...that quarterly BAC chart is just brutal. I hadn't looked at that in a while. Wow. Ouch. I saw PNC down hard today as well. Hmmm...if we don't go into the abyss, we're sure to get a good view of it soon me thinks.
Welcome back, btw.
=^.^=
Welcome back Mike,
I concur that the odds are all with the shorts in the US and in global equity markets generally. I look at the market from a wide ragne of perspectives: technical,fundamental (valuations comapred to asset, PE ratios), newsflow (e.g. earnings, macro cycle), past political/equity market cycles, etc. Everything has been saying and continues to says be short as far as I can see.
Good to have you back, Mike. You're no longer allowed these long periods away. My trading suffered without your sound analysis. Keep us informed!
Good to have you back Mike, I hope you enjoyed your time off. What a market to come back to. A great trader and stock writer I know,has for a long time now been pegging the DOW as down to 3500-5500 area by Summer. Hard to believe he will be right, but then who thought we could go from 14K to here, or that BAC would be a $5 stock?
Fomerly ADD Trader
Good to see you in my rss reader. Welcome back, Mike. Time for making a lot of money ;) Wait for good post...
Thanks guys, it's good to be back.