Feeling Negative? Hello Nancy

Submitted by theStockMasters... on Tue, 07/27/2010 - 16:20

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Financial News

Trading today is choppy and the smell of fear is poignant across the NYSE, Nasdaq, and lame AMEX. The time is now to review the Negative Nancy Index (QID, FXP, DGZ, DUG, VXX) once again.

Why is that? How about that Banks and brokerages have lagged behind the U.S. stock market, thus the concern among the "technical analysts" that equites are due to resume their decline. That's just reason No. 1 (thanks to Bloomberg) and we expect to see more stories today about doom and gloom clouding over the market.

Today's crap for feeding a possible market decline -- July 27 (Bloomberg) -- Banks and brokerages have lagged behind the U.S. stock market, spurring concern among technical analysts that the Standard & Poor’s 500 Index may resume its decline soon.

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Concept Capital said the group’s relatively low proportion of stocks hitting new highs is evidence of its failure to show leadership in July’s rally. Bank of America Corp. said a potential “double top” pattern in the NYSE Arca Securities Broker/Dealer Index may call into question optimism that the biggest slump since the bull market began is over.

The S&P 500 has dropped as much as 16 percent from this year’s peak in April on concern growth in the U.S. and China is slowing. Since then, better-than-expected earnings at companies from Apple Inc. and Ford Motor Co. have helped stocks, lifting the benchmark up 7.8 percent this month.

“What’s good for financials is usually good for the broader market, but the relative performance trend for the sector remains near a low,” John Kolovos and Craig S. Peskin, co-heads of technical analysis at Concept Capital, wrote in a note to clients yesterday. That “is problematic.”

Banks led the bull market during the S&P 500’s rebound from a 12-year low in March 2009. The S&P 500 Financials Index surged 170 percent to April 23, more than double the benchmark’s gain.

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SOURCE: http://www.businessweek.com/news/2010-07-27/banks-may-signal-trouble-for-u-s-stocks-technical-analysis.html