Here's a look at the daily chart of the S&P500. It will be the third time since mid-June that the crucial 200day MA will be tested. Will the overall market bounce off or break the support? Financial stocks are still in the dumps but there might be signs that they have formed a bottom as long as the lows of the reversal candlestick patterns hold.
There have been lots of talks that the financial sector needs to wake up in order for the overall market to move higher. Personally, I subscribe to this idea. The next most important point is to determine if the market has factor in the debt crisis for the financial sector? As we all know, stocks do have the ability to forecast the future and perhaps the reason why this particular sector have been stuck in a trading range since the 2008 financial crash could be due to the ongoing reported debt crisis. If this is the case, if this crisis is already priced in (which i am assuming it is - see my point above), we should see the financial sector moving higher soon since markets are forward looking. Anyone agree with me? Let's see.
Financials(Weekly charts)
There have been lots of talks that the financial sector needs to wake up in order for the overall market to move higher. Personally, I subscribe to this idea. The next most important point is to determine if the market has factor in the debt crisis for the financial sector? As we all know, stocks do have the ability to forecast the future and perhaps the reason why this particular sector have been stuck in a trading range since the 2008 financial crash could be due to the ongoing reported debt crisis. If this is the case, if this crisis is already priced in (which i am assuming it is - see my point above), we should see the financial sector moving higher soon since markets are forward looking. Anyone agree with me? Let's see.
Financials(Weekly charts)
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