Financials Are Dragging Their Anchors Lower

• Posted by Greg Harmon
• on October 3rd, 2011

The financial sector has been the worst place to put money to work. It never saw the same rise that the rest of the market had. Recently it has been performing with the market, not leading it lower despite the weakness in many big names. This is because there have been three distinct groups within the financials that have been masking the overall weakness: Credit Cards, Pay Day Lenders and the Exchanges. The Pay Day Lenders broke lower 2 weeks ago, (and it was noted in the post linked below) leaving just the last two prongs of the anchor hooked. But now it looks like those last two groups are going lower, with only two Exchanges, CME Group ($CME) and Intercontinental Exchange ($ICE) left to fall and the mighty Visa ($V) looking like it is next Credit Card to be declined. Let’s look at a few charts.

CME Group, $CME

CME Group, $CME, is moving lower after finding resistance at the 50 day Simple Moving Average. It is now moving below the recent range and looks ready to test the low near 235 from August. The Relative Strength Index (RSI) is pointing lower and the Moving Average Convergence Divergence (MACD) is negative and growing more so. Also the Bollinger bands are opening for a move lower. If it gets under 235 it could get running.

Intercontinental Exchange, $ICE

Intercontinental Exchange, $ICE, broke above an ascending triangle a few weeks ago and had continued to test the top of it as support. Now it has broken that support with a RSI sloping lower through the mid line and a MACD that crossed negative and is now increasing, supporting more downside. The next major support area is at 112.

Visa, $V

Visa, $V, is falling back to test support at 83.70 again near the 100 day SMA. As it moves there the RSI moving towards bearish territory and the MACD is growing more negative. Also the SMA’s are beginning to roll lower, starting with the 50 SMA. Under 83.70 there is support at 81.00.

The rest of the charts in the Financial sector look like crap. This could be horrible for the whole sector if these anchors also give up support.

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Pay Day Lenders Are Running Out of Cash September 20, 2011

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