Tens In Focus:
One of the oldest intermarket relationships is the way interest rates and financial stocks correlate (yields and stock prices too, but yields have been in a downtrend as markets rise powerfully). The banks could get a lift if this nascent strength in the ten year continues. Below is the chart, and it displays lower highs and lower lows, and one has to wonder if the new found vigor is just a dead cat bounce. It is now above a bearish descending triangle, and moves that break in the opposite fashion as they normally do, can lead to robust moves. On a weekly basis the ten year is looking for back to back weekly gains, for just the SECOND time since last September, to demonstrate just how soft the instrument has been.
Round Number Roadblock?
We have spoken about what AAPL means to technology and how it is battling with the very round 200 number, and that battle continues here. Not as important as it once was to the banking space, GS is currently witnessing rejection at the same number. It last approached 200 after its best day in 10 years, after its well received 1/16 earnings reaction. It was unable to make much leeway above the level, until recently with 9 of the last 10 sessions CLOSING above 200 (the lone exception was 4/15 its latest earnings report and finished just 9 pennies below).
The asset manager space has been a mixed bag, but when investors look to deploy their capital they should look where the creme rises to the top. Below is a good example of that with the best of breed FII and how it appeared in our 3/15 Financial Report (that was the last time we profiled the group as it was an overall laggard). It is also a good example of how the best stocks offer add on buy points, with FII acting well POST breakout from a 27.28 cup base pivot taken out on 2/6. Round number theory came into play with the bull flag trigger forming right at the 30 number. Since the breakout on it has advanced 10%. Truth be told or stop was too tight, but it did find support at an upward sloping 50 day SMA on 3/25.