Thursday, June 04, 2009

The Banking Index Is At Key Support

While the market has made a marginal push higher over the last week, the Banking Index has not confirmed any such move. In fact, the Banking Index has been moving lower for over three weeks. The bands on the chart are very long term support and resistance levels going back decades. Interestingly, we are sitting right at a band of strong price attraction but have not broken south of it.

With liquidity headed in the wrong direction as we showed in a post last week, the banks will likely have a hard time moving higher until more constructive fundamentals develop. Not to mention the substantial new equity issuances we talked about in yesterday's post that is surely acting as an anchor as well.
posted by TimingLogic at 7:20 AM