The Financial Stocks Next Move: (NYSE:JPM) (NYSE:BAC) (NYSE:GS)

May 30, 2014

Over the last couple of days the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has been steadily moving higher, making new all time highs. Many media outlets and so call experts are calling for the bull market to continue its rise. However, many cracks are starting to emerge, one must understand these, exercise caution and be ready to trade both sides.

Among the different sectors that I pay close attention to is the Select Sector Financial Slct Str SPDR Fd (NYSEARCA:XLF). This sector has been unable to make new highs, even as the light volume continues to float the markets higher. Banks such as; JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corp (NYSE:BAC), Goldman Sachs Group Inc (NYSE:GS) and other important financial institutions have been falling, in many cases putting lower highs in place and trading below their 200 day moving average as of the close on 4/28/2014

The Select Sector Financial Slct Str SPDR Fd (NYSEARCA:XLF) has been trading in an upward channel for about a year now. Looking at the chart below, please note how each of the bounces have become less sustainable in time. The bottom trend line has been tested multiple times. The first two tests of the line resulted in move away from the bottom of the channel for about four months. The third test resulted in only a two month move away from the line, and the forth hit lasted for only about a month.

Within the channel, a new trendline emerged which has kept the Select Sector Financial Slct Str SPDR Fd (NYSEARCA:XLF) from moving higher. Notice the sideways pattern developing right above the bottom trend line of this channel. This is telling us that financials are getting ready for another move lower. Perhaps a test of the 200 day moving average is in the cards. The Select Sector Financial Slct Str SPDR Fd (NYSEARCA:XLF) has not tested this important moving average since November, of 2012. Many would consider a move down into the 200 day moving average a buying opportunity. I would not agree with that buy level as the average is now a minor support level due to the consolidation above it.

When financials cannot move up with the markets, we must pay attention as it has often served as a warning signal. Banks such as JPMorgan Chase & Co. (NYSE:JPM), Goldman Sachs Group Inc (NYSE:GS) and Bank of America Corp (NYSE:BAC) are important global financial institutions. If the smart money is shying away from these equities, there must be a reason. As technical traders we do not need to know why. All we care about is the price action, and at the moment, price action is indicative of weakness creeping into the markets.

Kiliam L.

Elite Round Table

Market Action Update: Inside The Stock Charts To Profit

May 30, 2014

The Elite Round Table Stock Traders: Watch This!

May 30, 2014

TGIF Trades Setups & Levels: EXPR, BNNY, LGF, ANN, & More

May 30, 2014

Sell These Stocks Now! Nick Tells You How

May 29, 2014


Listen close to this radio interview where our Chief Market Strategist, Nick Santiago tells listeners where to go short certain stocks and when to buy them back for a bounce. This is how real traders make consistent profits in the markets, trading the moves based on the charts. Join our members as you get alerts to the great trades like today’s +6% gain earned on TWTR, check out all of the trades we have taken right here Then step up and control your financial future already!

What You Must Know About Stock Upgrades ConocoPhillips

May 29, 2014
Have you noticed how often a stock will sell off on great earnings, or go high on poor earnings? The reason for this is simple, the earnings reported by these companies, or any information for that matter, is already baked into the cake. And this cake, is the stock price. You all know that most of these analysts on TV are promoting a stock often because they own it. Most of the time they want to exit their position of the stock so they push the public to buy it so they can sell it. Or they promote how bad a stock is, so they can buy from the little guy it at a better price.
Here is a great example, Apple (NASDAQ:AAPL) last year was trading around $700 when a ton of analysts came out with upgrades saying the stock will continue higher, up to $1000. From that $700 point, the stock collapsed back to $450. Could you image if you bought AAPL at that high point, when all these “pros” were advising the stocks is going higher… you would have lost almost 50% of your investment. Sure, now AAPL has moved back higher once again, but could you have sustained the loss of nearly 50%? Most average traders and investors could not. Instead, the smart traders recognized this hype and shorted AAPL at $700. Then bought it back much lower.
Take a look at ConocoPhillips (NYSE:COP). COP was upgraded by Forbes and Guggenheim, suggesting a rise in the share price to $85. However, if you look at the COP daily time frame chart,  you will see a nice topping tail. This tail in the charts is a bearish signal for a stock. Based on the charts, this stock could be a good short trade, you can enter at current levels or wait for a 50% retrace of the move ($80.00) to minimize your stop. My profit target on the short side will be: $78.00 and $75.00.
Dismiss the noise, focus on the charts and the trades will come to you. Come join myself and 3 other Pro Traders at The Elite Round Table; profit while learning the same techniques we use to find the high success rate trades I mentioned above. Your time to advance is now.
Kristof De Block
Elite Round Table, Pro Trader

Trend Line Break Point On Watch: Inside The Stock Markets

May 29, 2014