The markets just heard from Federal Reserve Chairman Ben Bernanke. His comments on the economy were released at 1:30pm ET. They contained little to no new information. The markets were hoping he would throw a new bone of hope. At this stage, the markets are dipping slightly with the SPDR S&P 500 ETF (NYSE:SPY)
Earlier today, the markets hovered flat to positive. While the markets were holding steady, and seeing green, the bank stocks were down. Stocks like Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM) and Goldman Sachs Group, Inc. (NYSE:GS) saw red all day long. These stocks have been amazing leading indicators of market weakness. Today is just one example. It can be argued that the financial stocks, which topped out in January 2011 and fell all year, were leading indicators of the problems the market now is dealing with.
The bottom line is simple. Follow the financial stocks to find the true strength in the market. Should the financial plays become stronger, the markets could be making a longer term bottom. However, based on the one or two up days and then more downside they show these days, all market bounces can probably be used as a shorting or selling opportunity.