Monday, November 5, 2007

Financials Look Terrible

The financial sector looks terrible. Note the following very bearish conditions on the chart.

1.) Prices are below the 200 day SMA and have been there awhile.

2.) The shorter SMAs are below the longer SMAs -- another very bearish signal.

3.) Prices are below the SMAs, which will pull them lower over the short term as well.

4.) In early October the index rallied to the 200 day SMA but couldn't get higher. That means there wasn't enough enthusiasm for the sector to take it out of bear market territory.

This is a chart that should concern everybody.