Citigroup Cuts U.S. Bank Profit Targets by 45% on Europe, Slowing Growth (XLF; GS; JPM; MS; BAC; C)

It is very difficult to have a bull market when these guys are going backwards. Today the XLF is up 1.37%  at $12.54 with the S&P flat. Relative strength 1/2 hour in. This may be a case of the analysts catching up to the stocks.
It was the S&P Financials ETF that was our guide to the recent unpleasantness, see links and chart below.
From Bloomberg:

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.

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 

Beginning at the start of the year we tried to clue our readers to how important the Financials are to the overall market:
Jan. 17
How Dysfunctional Is This Market? (SPY; XLF)
Feb. 1
Chartology: Financial Stocks Are at a Decision Point (BAC; C; JPM; GS; WFC; XLF)

April 6 
Wall Street, We Have a Problem, Over (Major Financials Appear to Have Double Topped) SPY; XLF
Apr. 10 
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)
April 14 
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"
June 15 
"Financials Fully Confirm the Downturn" (BAC; C; GS; JPM; USB; WFC: XLF)
Aug. 10 
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:

Birinyi

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