BAC down 5.19%, JPM down 2.81%, GS down 2% and yet the markets hung in there admirably and with the help of a rally close to the end of the trading day, almost managed to close in positive territory. What could this mean?
(1) There is amazing underlying strength in these markets that can even withstand selling in heavy weight names like above. Do not mess with the bulls.
(2) This is just the calm before the storm and the action in financials today is a signal of things to come. See what happened to JPM and INTC after beating the street.
Both of the above are valid scenarios. Take your pick. My opinion? I am leaning towards the former. The bulls have been very impressive so far and in my view, they deserve the benefit of doubt. How long am I willing to give them this benefit of doubt? As I have stated many times before, until the bears manage to close the markets below 1150.
Take care and good luck!