1) GS and C both look like they are nearing trendline support... the interesting part about this is that GS, C, and UYG(the bank ETF) are nearing the pervious bottom from the 10/10 low. This is while the market is still managing to hold above 900 on the S&P. This will make heading lower than 848 pretty difficult as the financials are sure to bounce soon;
here are the charts;
You can see the line in the sand on UYG.. if that is taken out to the downside, I will step aside and wait for a lower target on the S&P (848, 770)
But a significant bounce is within sight here and if 1003 gets taken out.. a bear market rally.
2 comments:
CJ,
Would it be more appropriate analyzing XLF or IYF instead of UYG? Tracking is an issue with all of the 2x funds:
(1+a)(1+b) = 1 + (a + b + ab) = 1 + K
(1+2a)(1+2b) = 1 +(2a + 2b + 4ab)
= 1 + 2K + 2ab
and so on.
Hi Vin,
Thanks for reading. Both are appropriate I think. I use UYG because it is more heavily weighted with banks rather than investment banks.
My thesis is that banks and commodities will lead the next rally.
XLF though as a very similar technical picture where right around 13$ is the potential for the mega bounce. 80 cents below todays close.
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