The rout continues in the equity markets as I write this. One glaring problem that will need to be resolved is in the financials as shown below by a chart of the XLF.
Taking into account the past 3 years of price history, zoomed out to weekly candles we are seeing the 38.2% Fib Retracement of the past 3 year rally give away to lower prices. I think we will find at least some intermediate term support a bit lower. The 50% retracement zone coincides with an area of heavy volume as well as the 200 day moving average. This area of confluence should give us a level from which we can plan to see banks bounce (or not).
Many believe that a bull market cannot continue without participation from the banks. They are going to need to show me some strength, and soon.
I hope you all had a great weekend and I’ll be back with more soon.
OC