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Jeremy Frommer, CEO of Hedge Fund LIVE Jeremy Frommer has 20 years of industry experience and is currently responsible for general management and leadership of the General Partner. Previously, Mr. Frommer was a Managing Director and Head of the Global Prime Services Group (“GPS”) at RBC... More
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  • Financial sector takes a beating  0 comments
    Jun 2, 2011 10:12 AM | about stocks: XLF

    The overall market declined continuously throughout the trading day (6-1-11). Financials led the charge downward, as the XLF posted a staggering -3.4%. The financial sector is expected to be hurt badly by loans over the next 6 months. On Tuesday the S&P/Case-Shiller Home Price Index showed a decline of -3.6%, which was more than estimated. It’s a leading indicator of the housing industry’s health because rising house prices attract investors and spur industry activity. The number is based on the change in the selling price of single-family homes in 20 metropolitan areas. In addition, several analysts are now stating the double-dip in housing is confirmed.

    Most economic data that has come out in the last couple weeks has been poor. The US economy seems to be dragging after emerging from the world recession last year. Earlier today the ADP Non-farm Employment data showed a change of 38K vs. the 177K expected; this is the estimated change in the number of employed people during the previous month, excluding the farming industry and government. The results either a giant misstep by the economy or a grossly huge over-expectation by analysts.

    All of this effects the performance of banks in the long run in terms of lending defaults. Below is a daily chart of XLF. Notice the price cross below the green 200 day moving average and today (6-1-11) ended with a very bullish candle.

     econmic numbers, financial sector, fundamental, investment, technical, trade, Trading, XLF

    XLF breaks the 200 day moving ave (green line)

     * Check out Day Trade Well’s daily newsletter The Daily Technician, including over 30 support and resistance ideas every morning! Find it every morning under the Analysis section on HFL.com and sign up to receive the email every morning.

    DayTradeWell.com and HedgeFundLIVE.com

    Author contact: eric.kelly@hedgefundlive.com

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