Friday, September 25, 2015

Headlines That Comfort When Long

Following up on September 10's "The One Market Sector That Really Matters Right Now (XLF)":
If you had to have only one indicator of where the equity markets are heading, right now this is probably it. For different stages of a bull market there are different indicators that work best.

Early and late stage bulls must have the financials participating. In the middle speculations and lottery tickets confirm where you're at.

Back in the day, you could trust the brokerage stocks to indicate where the broader market was going to be in, say, three months.

That's not so true anymore, the brokers as a group got merged out of existence, but using their devil-spawn, the Citi's and BAML's you have an indicator that ranges from coincident to maybe a two week heads-up.

From FinViz, the one we watch, the S&P Financial Sector ETF, $23.01 up a dime last:

XLF  The Financial Select Sector SPDR Fund daily Stock Chart
And a megabank shall lead them. So if the train and the bus are going to the same place, get on board....
DJIA   16,335
S&P    1952.59
And today's headline?
Dow jumps triple digits as Nike leaps 9%; financials lead
DJIA  16,397
S&P   1948
XLF   $22.84

See also: Once Upon a Time: The Bear Market Fiction.