Friday, May 1, 2015

Still a bull in bear’s clothing:

I know it looks bad when on Thursday April 30. 2015 the Dow Transports closed below both its 50 and 200 day moving averages (MA). Pile on the Russell 2000, the biotech BTK index and the semiconductor SOX index – all falling below their related 50-day MA.

But – no fear because the North American financial sectors displayed no technical damage – with our own S&P/TSX Financial Services sector still above both the 50 & 200 day MAs. The current leadership from the US banking sector is still in place in spite of Thursday’s broad sell-off with the Sector SPDR Financial ETF (XLF) holding at the 50 day MA. According to ALPS Portfolio Solutions Distributor, Inc the Sector SPDR Financial ETF (XLF) is a wide array of diversified financial service firms are featured in this sector with business lines ranging from investment management to commercial and investment banking

The top six holdings of the Sector SPDR Financial ETF (XLF) are Berkshire Hathaway B (BRK.b), Wells Fargo & Co (WFC). JP Morgan Chase & Co (JPM), Bank of America Corp (BAC), Citigroup Inc (C) and Goldman Sachs Group Inc (GS)

Our chart – once again - displays two US financial bellwethers - Goldman Sachs and JP Morgan on a daily bar with both just backing away from recent new 52-week highs. Note both are still trading above a rising 50-day MA – so I still think we stay in May.

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