Marketview: Healthcare Wins, Financials And Consumer Stocks Lose

The big zero really says it all doesn’t it?  An almost impossibly significant number delivered days before President Obama is set to give a talk on jobs and the economy.  This is the height of drama folks.  The latest “Friday surprise” comes courtesy of the Federal Housing Finance Agency.  The FHFA will be suing 17 of the world’s biggest banks for mortgage related fraud.  Funny, first the government wanted to save these institutions and now it seems that they want to destroy them.

Winners: $ABT, $PFE, $MRK, $BA, $OXY, $BHI, $WMB

Losers: $BAC, $GS, $JPM, $MS, $HD, $LOW, $WMT

Healthcare was the clear thematic leader on the winning side but the winning stocks were a complete mixed bag and does not suggest and serious risk on allocation.  The losers were predictably led down by financials.  More telling is that even some safety names were dragged down this week.  This is not a constructive picture and suggests that investors are selling out of decent defensive stocks and have given a clear vote of no confidence by using the last pullback as a selling opportunity.

I’m cautious on the market here.  I felt last week that we would see our oversold bounce play out to somewhere between 1220 and 1250 $SPX and it did.  Now we have to start looking for support areas.  One pattern I’m following suggests 4-6 more days of selling after this type of price action.  Notice that both the winners and loser charts are both forming clear bear flags.   Not a good sign for the bulls.  I’ll be watching to foreign markets on Monday for an indication of what to expect next week.



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