Rusty Market Musings » Financial Sector

17/06/2009 Bulls counter with a flat day

LtPinback — Wed, 17 Jun 2009 22:47:54 +0000

Selling at the open then the bulls manage a nice rally but more selling at the close results in a flat day. Volume did increase to average but most volume was on the selling side.

S&P 500 SPDRs 5min Chart

Latest inflation number not a worry and President Obama unveils the widest reshape of the financial sector in 30 years.

S&P 500 Index Daily Chart

02/06/2009 Consolidation

LtPinback — Tue, 02 Jun 2009 21:12:37 +0000

Flat day with price channel between the Pivot Point and yesterday’s high. Volume was average.

S&P 500 SPDRs 5min Chart

Financials were weak on the day on worries about the dilutive impact of recent stock offerings.

S&P 500 Index Daily Chart

19/05/2009 Choppy day

LtPinback — Tue, 19 May 2009 21:58:46 +0000

A small gap lower after yesterday’s large move then a choppy fight to control price ending in a choppy channel with support at yesterday’s high. The day ended almost flat with a nice sell-off in the last haft hour prompted by the credit card bill passing the senate vote. Volume was average.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

The Financial Sector fell late in the day and took the market with it as the U.S. Senate passed a bill to curb sudden credit card interest rate increases and hidden fees.

S&P 500 Index Daily Chart

11/05/2009 Change of direction?

LtPinback — Mon, 11 May 2009 22:43:40 +0000

Market opened on a gap lower and remained in a tight channel between 919 and 909 for the rest of the day. Volume was average.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

The Financial Sector retreated on dilution worries and a fresh wave of profit-taking.

S&P 500 Index Daily Chart

08/05/2009 Recovery is the trend

LtPinback — Fri, 08 May 2009 22:09:36 +0000

S&P 500 opened on a gap higher and touched the R1 line within 20 minutes from the start of the trading day. From there a quick sell-off to the Pivot Point lasting 40 minutes and then the ticker settled in an upward trend for the rest of the day closing at 929.23. Volume was high.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Banks start detailing the different schemes to raise the capital as per the Government request. Market likes what it hears and thus rally continues and the word “recovery” is everywhere.

S&P 500 Index Daily Chart

06/05/2009 The fine art of subtlety leaking gone forever?

LtPinback — Thu, 07 May 2009 00:05:19 +0000

Market opened with a profit-taking closing the gap move followed by an uptrend that took the ticker to new highs. The closing price was at the resistance level at 919.53. Volume was high.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Reports on improvement job data and the leaked stress test results took market to new highs. The KBW Bank index rose 11.5 percent.

S&P 500 Index Daily Chart

04/05/2009 Rally

LtPinback — Mon, 04 May 2009 22:53:32 +0000

Market opened at R1 and rallied to R3 within the first 45 minutes. The rest of the day was a waiting game to see if bears either took control of the market or bailed out of positions. In the end price slightly trended up and panic covering took place in the last 10 minutes. Volume was a bit above average.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Improvements in housing sector data and reports suggesting bank balance sheets need less shoring up than feared plus the White House comments that the Obama administration is not seeking to ask Congress for more bank bailouts for now took the market to new highs. The KBW Bank index rose 14.69 percent.
The S&P 500 jumped up to new highs today and now is facing the resistance at 920.

S&P 500 Index Daily Chart

01/05/2009 Calmness before the storm?

LtPinback — Fri, 01 May 2009 21:55:04 +0000

A flat opening with a very choppy double visit to yesterday’s low levels. Then a classic charge to the Pivot Point followed by flagging action. At 1:15 the Pivot Point was broken but the breakout was reversed again very choppingly and with increasing amplitude at the end of the day where price swung by about half the daily trading range. In the end the week closed at 877.52 just a bit beyond the edge of the channel defined by the 870-825 levels.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Financial Sector is lagging the market on worries about the release of the results of the stress test performed by the Government.

S&P 500 Index Daily Chart

20/04/2009 That was scary

LtPinback — Mon, 20 Apr 2009 22:31:24 +0000

Big gap down and a relentless sell-off from start to finish. Unexpected? Direction – No. Magnitude – Maybe. VIX rose 15.44%. Volume was high.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

BAC with CEO Ken Lewis at the helm can’t do anything right. Now we find they cannot even cook the books properly. Go figures.
Credit environment is getting worse and U.S. government officials have determined they can avoid asking Congress for more bank bailout funds by converting the existing loans to some U.S. banks into common stock thus diluting stockholders’ stakes. A stress test results report going around the net implies the Financial Sector is technically insolvent. The U.S. Treasury disputes its veracity. These are the news that sunk the rally.
On the technical side the retracement was expected but the magnitude of the move for the first day was clearly not. The 825 level was not tested and must provide at least some support to calm the market down. The 800 level may be tested but must hold to prevent a panic sell-off and a retest of the March lows. The 875-880 range reaffirms its status as strong resistance. Fibonacci retracement suggest 795 as a first target for a downward move.

S&P 500 Index Daily Chart

Did you hear? Banks are profitable after all the financial shenanigans by the Government

LtPinback — Thu, 09 Apr 2009 22:18:34 +0000

Market opened with a huge gap up and never looked back. There was very little profit taking at the beginning of the day (for such a sizable gap this is very telling) followed by a charge to the 850 resistance. The first charge was unsuccessful and the LOD were tested again but then price took off and never looked back. At the close there was even a mini rally either by desperate short sellers covering or longs betting on carrying momentum into the 3 day weekend. Volume was high.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

The news of the day was Wells Fargo (WFC) expecting to report a record quarterly profit, thus prompting a continuation of the rally. The Financial Sector jumped about 14 percent and the KBW Bank index jumped 20.1 percent.
On the technical side the November high downward trendline was broken decisively and price close above the 850 key level. Price stands in the middle of a trade range spanning from 825 to 880. The strength of today’s move suggest testing of the upper bound is almost guaranteed and even a forage into the 920 level seems quite likely.

S&P 500 Index Daily Chart