In my post of December 29, 2015, I stressed the importance of the Financials ETF (XLF) in, potentially, propelling the SPX to an increase of 5-6% for 2016.
You can see from the Daily ratio chart below of XLF:SPX, that price weakened considerably afterwards and fell to new lows not seen since 2012. Price is attempting to stabilize above that low, but all three indicators are still in downtrend and display new “SELL” signals, and price action is still under the bearish influence of the Death Cross formation of the moving averages.
If price drops and holds below near-term support of 0.0105, we could see a significant drop in the SPX, likely to new lows for the year, as I mentioned on April 3.
I’ve offered up Prudential, shown below, as a short idea over and over again, but it just sort of farted along, in spite of its absolutely glorious topping pattern. Well, our national nightmare is over. It’s finally falling, and I expect ungodly lower prices to come in the months ahead.
Ref: Why the big broker behind your financial adviser might be working against you
Tell me, which of them (the big brokers and investment houses) warned anyone about it being time to sell in 2000, or in 2007? There are exceptions out there, especially in smaller boutique style shops. But generally speaking, this thing we call Wall Street (big firms and the media that is their propaganda arm) exists to sell people the dream, then mark it up, front run it (in one way or another, legally or otherwise) extract fees from it and ultimately fleece it on the way down again (as regular people puke a tanking market and pay trading commissions for the privilege).
Here I cue up the old story about when I bought my first and only BMW (it was fine, but really it was not me) back in 2002. The deal was done and I sat with the business manager to finalize the transaction. He was a kid who had been fired from Merrill Lynch not 2 years earlier for keeping his clients in cash and totally safe at the market top. Problem was, he was not turning
tricks, err I mean commissions for Merrill. All done.