However, the technical side of the financials is bullish right now. Here is the daily chart. Pay particular attention to the MACD reading which is very oversold. The MACD hasn't been this low on the daily chart in 5 years. The last two times the index was at these levels the market rallied 4 1/2 points (2002) 6 points (2003).
Now here is the weekly chart over a 5-year period. Notice the exact same reading of the MACD.
I am not making a recommendation either way; I'm simply relaying what the charts are saying.
1 comment:
The MACD hasn't been this low on the daily chart in 5 years. The last two times the index was at these levels the market rallied 4 1/2 points (2002) 6 points (2003).
Well I guess the question is whether the underlying fundamentals are worse now than those points in 2002/2003. I'm thinking they definitely are.
There might be a bounce, but I expect it'd be a kind of dead cat bounce on the way down to even lower levels. There's a lot of problems that need to get flushed out of the system right now and this correction is a long way from over.
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