Sunday, July 18, 2010

Financials and Retail

Financials
GE is the mother of all lenders, so let’s start here. GE had a low-volume rally (a wedge) into old support (now resistance) at $15 and imploded on Friday on heavy volume (Red Arrow). Bank of America (BAC) rallied into its 50-day on weak volume at got creamed for -9.2% on Friday – also on massive volume. That is not the action of a Bull Market…



Credit Cards
You have to wonder how much of the selloff in Financials on Friday was the result of the new Financial Reform Bill. MasterCard (MA) and Visa (V) have both found significant support right below their current prices on 3 previous occasions and those levels had better hold here.

The potentially bullish side is that the 50% retracements of the recent Bull Market sit just below the breakdown points, so a shakeout on a price break and then a rapid rally back up above support would not surprise me. The same thing happened recently on Semiconductors (SMH). Just more computerized fleecing of the average investor by the con artist on Wall Street.



Retail
Retail is an absolute train wreck. Take a look at the charts of Wal-Mart (WMT), Macy’s (M), Sears Holdings (SHLD), Best Buy( BBY), Nordstrom (JWN), Bed Bath & Beyond (BBBY), Costco (COST), Tiffany (TIF), JC Penny (JCP), Target (TGT), Saks (SKS), Overstock (OSTK)…

There are a lot of horrible looking charts in Retail. That can’t same much good about the Consumer.

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