All the way up to the stars, where it seemed like bears are tired of calling for pullback, lately battered financial sector has got up its over 120% increase for just half a year. There was no secret that current rally from march lows was pushed by financials, that skyrocketed more than twice relatively to S&P 500 index with its plus near 50% from march 9th 09' lowest point. But financials seemed to play even huger role on the market when it was revealed that in the 35th and also final summer week, more than 20% of volume on NYSE was accounted by Citi, AIG, Fannie Mae & Freddie Mac only.
On monday 31st financial sector opened with huge downside gap. Still it have got back morning loss to the closing bell, but there rung first alarm bell to bulls, when four financial giants, i mentioned above, have plunged on the median of minus 6% that day. Profit tacking in those guys, after their increase in august for an average of more than 200%, have continued on tuesday 1st september. On dramatically volume expand, S&P 500 plunged back below 1000p. But on the following sessions any bears attempts to push the market downside have failed.
On the chart above we can see how on wednesday 2nd september morning bears try to dip ES below 990p. have failed and subsequent session hours ES was oscillating near open swing on the low volume, that have totally declined relatively to past session on 27%. Endeavour was repeated next day, on thursday, but bears didn’t appeared to have volume accumulation (total ES volume that day have plunged 41% in comparison with tuesday) and closer to the session finish, bulls back ES above 1k.
Bears failed to have volume confirmation of their plans and on friday ES have pared half of its early week losses. But still it was done on the weak volume, relatively with tuesday plunge volume jump. It could be easily explained in the matter of shortened week ahead with Labor Day holiday on monday. But the volume story can have two conclusions.
In the past week financials appeared to be the most underperforming among 8 leading sectors with the decline of roughly 3,5%. The decrease looks less dramatic in comparison with median week result of C, AIG, FRE & FNM. Four financial giants have shrunk on an average of almost 15%.
It doesn’t corresponds with market sell signal but with financials playing leading role in the current rally there goes the question are they able to recover and if not, who will be the next to lead the market upside? Somehow, starting with the beginning of next week we have to see strong recovery of those stocks to see subsequent fresh market highs. Indeed, the early signs of four financial giants recovery already in place.
In the previous post I have revealed that TRIN (the indicator that in past showed interim, short-term bulls-bears placing environment) was partly nicely indicating what was going on with volume in the four mentioned financial stocks. On monday & tuesday the indicator was extremely bearish while already on wednesday kind of mayhem was in place. After already usual inadequate bearish opening, closer to the middle of the session TRIN dipped below 1 that corresponds to buy signal. And it has managed to stay pretty bullish on thursday & friday.
Still, one more trouble for the bulls is continuing to stay energy. Under the pressure of numerous failed attempts to break above resistance level of 75$/b for light crude oil, the sector still didn’t manage to make new highs with S&P 500 and 7/8 leading sectors, back from the end of july to the beginning of august. And for now, we still do not see any energies recovery while tracking it back from the beginning of last week or from the start of last summer week when majority of sectors were near their highs. Both, energies and financials are the leading laggards, to continue the rally bulls have to deal with.
On monday 31st financial sector opened with huge downside gap. Still it have got back morning loss to the closing bell, but there rung first alarm bell to bulls, when four financial giants, i mentioned above, have plunged on the median of minus 6% that day. Profit tacking in those guys, after their increase in august for an average of more than 200%, have continued on tuesday 1st september. On dramatically volume expand, S&P 500 plunged back below 1000p. But on the following sessions any bears attempts to push the market downside have failed.
On the chart above we can see how on wednesday 2nd september morning bears try to dip ES below 990p. have failed and subsequent session hours ES was oscillating near open swing on the low volume, that have totally declined relatively to past session on 27%. Endeavour was repeated next day, on thursday, but bears didn’t appeared to have volume accumulation (total ES volume that day have plunged 41% in comparison with tuesday) and closer to the session finish, bulls back ES above 1k.
Bears failed to have volume confirmation of their plans and on friday ES have pared half of its early week losses. But still it was done on the weak volume, relatively with tuesday plunge volume jump. It could be easily explained in the matter of shortened week ahead with Labor Day holiday on monday. But the volume story can have two conclusions.
In the past week financials appeared to be the most underperforming among 8 leading sectors with the decline of roughly 3,5%. The decrease looks less dramatic in comparison with median week result of C, AIG, FRE & FNM. Four financial giants have shrunk on an average of almost 15%.
It doesn’t corresponds with market sell signal but with financials playing leading role in the current rally there goes the question are they able to recover and if not, who will be the next to lead the market upside? Somehow, starting with the beginning of next week we have to see strong recovery of those stocks to see subsequent fresh market highs. Indeed, the early signs of four financial giants recovery already in place.
In the previous post I have revealed that TRIN (the indicator that in past showed interim, short-term bulls-bears placing environment) was partly nicely indicating what was going on with volume in the four mentioned financial stocks. On monday & tuesday the indicator was extremely bearish while already on wednesday kind of mayhem was in place. After already usual inadequate bearish opening, closer to the middle of the session TRIN dipped below 1 that corresponds to buy signal. And it has managed to stay pretty bullish on thursday & friday.
Still, one more trouble for the bulls is continuing to stay energy. Under the pressure of numerous failed attempts to break above resistance level of 75$/b for light crude oil, the sector still didn’t manage to make new highs with S&P 500 and 7/8 leading sectors, back from the end of july to the beginning of august. And for now, we still do not see any energies recovery while tracking it back from the beginning of last week or from the start of last summer week when majority of sectors were near their highs. Both, energies and financials are the leading laggards, to continue the rally bulls have to deal with.
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