Earnings Overload:
There were a bevy of earnings report this past week in the financial space. One of the better accepted moves was from STT which jumped 6.7%, but this name has been a laggard, and even with that energetic move it still trades 37% off most recent 52 week highs. Many of the other moves were more pedestrian with MS BAC C GS BLK and JPM all higher, albeit less than 2% (C fell by less than .1%). WFC and AXP were the exceptions with both dropping in the 3% neighborhood. With all that being said the XLF still fell 4 of 5 days this past week, and the presence of some dubious candlesticks raises concerns (4 of the first 5 sessions of July were spinning top candles).
Risk On Still In Play:
One aspect of the financial space that is closely watched to get a feel of investor sentiment is the high yield space. When market participants are feeling good, they tend to speculate a bit more and the HYG is a good gauge to monitor this activity. The ETF is on a current 4 week losing streak, but the combined total was less than 1%, and volume was tepid. By contrast the 3 weeks immediately preceding that rose by nearly 3% and the volume was much stronger. A successful bounce off the 50 day SMA less than 1% away would indicate investors still feel this rally has some juice left in it.
Examples:
New issues are often best waited upon to open a position in a name for technicians. First it needs to form a proper base, and secondly it will often trade wide and loose, making to hard to form an edge. There are some exceptions, and one may be the chart below of TW and how it appeared in our last Financial Report from 7/3. For a good portion between mid April and the end of June it traded somewhat uncharacteristically taut. The sideways action formed a nice double bottom pattern which was taken out on 6/28. The initial touch of a rising 50 day SMA following a breakout is often a solid entry, and it is currently dealing with the very round 50 number. Intraday Friday it broke above that figure and a bull flag but CLOSED under it.