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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
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Saturday, July 30, 2011

GS, C, XLF & JPM treading water...

As can be seen on the Weekly chartgrid of GS, C, XLF & JPM below, these financial stocks and ETF have lagged the rally enjoyed by the overall equities markets and have basically remained at their 2009 levels...although XLF tried briefly in 2010 and 2011 to break above and move higher, but failed only to fall back into the upper range of the 2009 levels.

Overlayed on these charts is an uptrending regression channel. Price is consolidating around the -1 deviation level of this channel. A sustained fall below this level could send price back down to the -2 deviation levels.

A downtrending regression channel is also overlayed on the 4-hour chartgrid of GS, C, XLF & JPM below. Price has been attempting to form a level of support around the "mean" while bouncing in between the +1 and -1 deviation levels and essentially chopping sideways in a volatile, wide channel at their 6-7 month lows. At the moment, the "mean" represents an important support level in preventing a return to the -1 deviation level below. These levels are:
GS = 129.00
C = 38.00
XLF = 14.75
JPM = 40.00

I would re-iterate the comments from my June 25 post which stated that, in my opinion, a meaningful reversal of the equity markets to the upside would need the Financials on board, as well.

As an update to my post on July 27, I would mention that the 100sma has now crossed below the 200sma on the Daily chart of XLF...a hold below and move lower would make a move higher in the equity markets more difficult.

Can the Financials deliver?...in the short term?...in the long term?...