Dow Jones Industrial Average closed slightly above 8000 points on Friday. The index was down 148 points on Friday after falling 226 points during Thursday’s session. Sellers are definitely in control.
In order for the market to recover, the financial sector needs to stabilize first and banks will need to provide liquidity to push up the market.
A look at the XLF shows that the financial sector in US is still trying to find a bottom. Unlike the Dow, XLF actually went below its Nov 08 lows of $8.54 on 20 Jan 09 before rebounding to a high of $10.51 on 28 Jan 09. It closed at $9.24 on Friday.
The phase chart shows that XLF is still in “Bearish” territory. It tested the 50 day moving average in the beginning of January. But the resistance proved too much for the bulls to overcome and sellers are gaining control again.
The next support level for XLF is at $8.00 level and if this support is broken, it will mean more pain for the bulls.
In order for the market to recover, the financial sector needs to stabilize first and banks will need to provide liquidity to push up the market.
A look at the XLF shows that the financial sector in US is still trying to find a bottom. Unlike the Dow, XLF actually went below its Nov 08 lows of $8.54 on 20 Jan 09 before rebounding to a high of $10.51 on 28 Jan 09. It closed at $9.24 on Friday.
The phase chart shows that XLF is still in “Bearish” territory. It tested the 50 day moving average in the beginning of January. But the resistance proved too much for the bulls to overcome and sellers are gaining control again.
The next support level for XLF is at $8.00 level and if this support is broken, it will mean more pain for the bulls.
No comments:
Post a Comment