Monday, October 18, 2010

Five Year Charts of Financials Shows Them Falling on Long as Well as Short Time Frames

The nearby graphs are 5-year depictions of the prices of Capital One, BofA, Morgan Stanley and Wells Fargo; click on them to enlarge. The green lines are the 50-day moving averages and the red lines are the 200 day moving averages. A "death cross" of the shorter average below the longer average is seen. The lines are pointing down, so the trend is down over all relevant time periods.
This is trouble.
One week's headlines re robosigning cannot do this. The weak economy has been doing this. The market is saying that QE2 is not going to do the trick. Meanwhile, not shown are very different looking strong charts not tied into the housing mess, such as precious metals, AAPL and various tech and retailing stocks.
A "healthy" correction in silver that would likely accompany a market correction led by further down-moves in the financials would in my humble opinion be a buying opportunity, but I'm not looking to buy any of the above till the truth of their holdings and various exposures is out.
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