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What the Financial Stocks Are Telling Us

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As go the piggies, so goes the poke.

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Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial).

As I'm about to step away from the screens for 10 minutes -- and a lot can happen in 10 minutes -- I wanted to follow-up my previous Buzz with some actionable levels.

S&P 1190 (today's high) and S&P 1200 (gap lower on Monday) are near-term backstops for the bears. While I openly sensed a downside "tap" a bit earlier, I feel compelled to follow it up with some context. I've learned to stay humble or the market will do it for you.

Goldman Sachs (GS) -- something still doesn't smell right there -- Mother Morgan (MS) and JPMorgan (JPM) have emerged as flies in this broader upside try, and the piggies are probin' lower as evidenced by the red BKX.

Remember when the BKX and SOX (semis, also red) were our super-tell duopoly? I do as well, and yes I feel old.

I would also like to update the S&P vs. BKX dynamic as it foretold the latest malaise (the signs were there if you chose to see them). I offer both charts below for some visual representation.


Click to enlarge



Click to enlarge

Discipline over conviction as we find our way. And remember to smile. We're a few short hours from our requisite respite and I, for one, am looking forward to focusing my attention on the important stuff (like the laughter of little kids). This tape may suck the life out of us, but it's up to us to refuse it anew.

As always, I hope this finds you well.

R.P.

Twitter: @todd_harrison

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No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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