It was the S&P Financials ETF that was our guide to the recent unpleasantness, see links and chart below.
U.S. banks’ third-quarter profit estimates were cut an average 45 percent by Citigroup Inc. on concern that the global equities rout and volatility in credit markets will pare earnings from trading and investment banking.
Morgan Stanley (MS) may post profit of 25 cents a share, lower than a previous estimate of 36 cents, while Goldman Sachs Group Inc. (GS) is forecast to report earnings of 10 cents a share, down from $2.70, analysts including Keith Horowitz wrote in a report dated Sept. 11. JPMorgan Chase & Co. (JPM), the most profitable U.S. bank, may report $1.17 a share, down from $1.26, they said.Beginning at the start of the year we tried to clue our readers to how important the Financials are to the overall market:
Profit estimates for the next two years were also pared because of faltering economic growth and uncertainties regarding regulations and new capital requirements, Citigroup said. The MSCI World (MXWO) Index has shed 20 percent since the beginning of May on concern that Europe’s sovereign debt crisis and a slowdown in the U.S. may stall the global economy....MORE
How Dysfunctional Is This Market? (SPY; XLF)
Chartology: Financial Stocks Are at a Decision Point (BAC; C; JPM; GS; WFC; XLF)
Wall Street, We Have a Problem, Over (Major Financials Appear to Have Double Topped) SPY; XLF
Giant Financial Stocks Still Struggling (BAC; C; GS; JPM; WFC; XLF)
I don't mean to harp on this point, I'm just a tad concerned about the implications for the overall market that the weakness in the big financials might be pointing to....April 11
Raymond James Pounds the Table on Biggest Banks, Market Yawns (BAC, C, JPM; XLF)
Goldman Sachs: We’re Going ‘Neutral’ on Financials, Here’s Why… (BAC; C; GS; JPM; MS; WFC; XLF)
April 28, 2011
"Short 'em All. They Aren't Worth the Paper They're Printed On"
"Financials Fully Confirm the Downturn" (BAC; C; GS; JPM; USB; WFC: XLF)
And We're Back: Why We Listen to What the Financial Stocks are Saying (BAC; C; JPM; WFC; XLF)
Keep an eye on that churning price action in the $12-$13 range. A failure to fall through that triple touch of $12 would be very positive whereas a break might lead to this: