The markets gapped up at the open, but then fell just below the 20 minute SMA. Prices tried to rally, but ran into resistance at the 10 minute SMA. Prices then ping-ponged between the 50 and 20 minute SMAs until they fell below the 10 minute SMA a little after 10 AM. But then the 10 and the 20 minute SMA had crossed under the 50 minute SMA, indicating further moves downward. Prices continued to fall until 11 AM when prices stabilized. Then they moved sideways until 12:30. Prices moved above th 10 minute SMA and then advanced above the 50 minute SMA. But prices were again pulled down. They attempted one more run right before closing but could not maintain the momentum. We closed near lows for the day.
Financials were the main issue:
Washington Mutual Inc. posted its biggest drop ever and National City Corp. tumbled to a 24-year low after last week's collapse of IndyMac Bancorp Inc. spurred speculation that regional banks are short of capital. The companies said they've seen no unusual depositor activity. Fannie Mae and Freddie Mac erased an earlier rally fueled by Treasury Secretary Henry Paulson's plan to help rescue the largest U.S. mortgage lenders.
.....
Zions Bancorporation, the Salt Lake City-based lender with operations in 10 Western U.S. states, fell 23 percent to $19.73. First Horizon National Corp., Tennessee's biggest bank, slumped 25 percent to $5.04.
This shouldn't be surprising considering all the turmoil related to Fannie and Freddie over the last few days. And don't be surprised to see it continue.
