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The Sector To Follow

|Includes: CS, DB, GS, JPMorgan Chase & Co. (JPM), MS
All traders and investors should be watching the financial stocks very closely. When these stocks catch a bid or rally higher the major stock indexes will usually rally or hold up. This morning, many of the leading financial stocks are trading in positive territory while the major stock indexes begin the day lower. If these leading financial stocks can hold up today the major stock indexes are likely to stave off another sharp decline.

J.P. Morgan Chase & Co (NYSE:JPM) is the leading financial stock in the United States and possibly the world. This morning, JPM stock is trading higher by 0.26 cents to $30.38 a share. This leading financial stock made a new 52 week low on September 22, 2011 at $28.53 a share. The stock is now trying to make a higher low on the daily chart, however, the stock remains very weak at this time. JPM stock is trading below its 20, 50, and 200 moving averages on the daily chart which put the stock in a weak technical chart position. Often, as long as the stock remains weak on the charts the institutional traders will usually sell into any bounce. Should this stock decline intra-day traders should expect the major stock market indexes to follow.

Other leading financial stocks that should be followed closely are Goldman Sachs Group Inc (NYSE:GS), Morgan Stanley (NYSE:MS), Deutsche Bank AG (NYSE:DB), and Credit Suisse Group NYSE:CS). When these financial stocks decline it is prudent to expect the major stock indexes to follow. On the flip side, if these financial giants rally or catch a bid higher it would be prudent to expect the markets to rally off the lows and possibly trade higher on the session. The financial sector is the one sector to follow at this time.

Nicholas Santiago