Markets were limp to kick off the week Monday with the S&P 500 down for the third straight session finding some bids at the 1700 handle. It felt like a classic sell the news situation as decent overnight news came from the German election, decent PMI reports from France, not a typo, and China. When good news is not interpreted as such in stock prices it could indicate fatigue. Concerning are the actions of the financials, as the XLF undercut its 50 day SMA today and is off a quick 4%. The last 3 days the ETF has finished on its lows for the session. It has been setting up a flat base trigger with a pivot of 21.03. Its largest component BRKB slipped today and is right at its crucial 50 day SMA. JPM perhaps will catch a bid at its 200 day SMA. Problem is that it has taken on the look of a bearish head and shoulders pattern. The left shoulder was slightly higher then the right which is textbook and its neckline is right at the round 50 handle. A move and CLOSE below that 50 number targets 43. Measuring the top of the head to the neckline was 7 points, then subtract that from the 50 number and you get your target. Looks like a tug of war will transpire their. John Pierpont must be twisting and turning in his grave looking at his stock chart, and pondering the companies 5000 new regulation hires.
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