Financials Lead The Way Lower
The banks sold off sharply today down 6.79%. This index has been weighing on the market for many months so it shouldn't be a surprise to see this group of stocks leading us downward.
If you look at the above chart of the BKX and analyze each of the last 3 declines you'll notice that momentum is picking up with each leg down. From A to B we saw the index decline 44%, C to D was a 47% decline and from E to F we have a 49% decline. If we take the smallest decline (44% just to be conservative) and subtract that from point G, we get a downside target of around 18.27. The point I'm trying to make here is that there is still more room on the downside for the banks. Look out below!
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3 comments:
surprisingly the BKX didnt take much of a hit today(-.6%) compared to the Dow(-1.34%). I agree with you though...banks and broader market are going down and today showed there isnt much support out there.
Kevin,
I agree with your analysis. I believe anyone trying to pick a bottom in this sector is on the wrong track.
Are you shorting any bank ETFs or any banks in particular right now?
ug, it will sure be nice when times change and you can be posting more bullish stuff again.
Thanks, your blog has been helpful to my trading, saved me from some losses.
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