Monday, July 14, 2008

Keep An Eye On This Group Of Stocks

Does the above heading sound familiar? Keep an eye on this group of stocks was a post I did on May 20th which suggested that we watch the mortgage finance stocks because a large trending move to the downside was about to unfold and that is exactly what has happened.

The purpose of this post is not to brag about me making a good call (I'll be the first to admit the market has humbled me many times) but to reinforce that technical analysis does work. By looking back at why I was bearish, you might be able to recognize a similar pattern in the future and take advantage of it.

The mortgage finance index (MFX) is just about at the downside target which is 22.

Brett over at TraderFeed has an informative post on the regional bank collapse that you might find of interest.

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