JT,
OK, I'll take a stab at it. As a disclaimer, I must say that the BKX.X is not one that I follow regularly (at least knowingly <g>). Some contend that as go the banks, so goes the market. At any rate, here is my take, from a technical standpoint only. BTW, this is an odd chart:
1) The larger picture shows that BKX is in a downtrend out of a triple top (or failed breakout 11/16).
2) On a more hopeful note, however, this current formation looks very similar to me to the set up for the Oct 18 bottom. There was pent up optimism which resulted in a failed rally on the 14th (four days before the bottom). This time it was the 3rd (Friday afternoon) and the rally failed Monday. Very possibly late yesterday or today marks the bottom.
3) Stochastic oversold condition is very extended (much like the S&P) and with very little positive catalyst this market rallies (at least for the near term).
4) Money flow into the market is just too vast to allow any real market failure right now. Any major down move will happen after the spicket is turned off (or at least way down) after the first of the year. Probably early to mid February is the soonest we can expect any significant correction in the market.
5) In my opinion, yesterday's low on the BKX 793.55 was a blow off bottom (in all likelihood) and was a class A bullish divergence in terms of my read of %D (slow) Stochastics. This sets up the strongest possible buy signal when confirmed (by slow stochastic rising above 25%).
6) At a minimum, this is a low risk buy opportunity as this index is very oversold. If the added bonus of this being an intermediate bottom of the downtrend, this sets up a higher low on the big chart which is very long term bullish.
Well that's my read (in a Reader's Digest version) of the BKX.X for what it is worth. However, if I was real smart, I'd be rich <vbg>! I'd be curious to know your take on this read.
Matt |
