The stock market has been discounting (marking down the price) of Wall Street brokers and banks since May. The charts of all of these stocks began to turn down in the spring. We really didn’t have any news why this was happening! The sector became unfavored, and sell signals were appearing on every chart in the group.
However, it’s only been the past few weeks (in late September and into October) when we learned the extent of the damage subprime mortgages caused at these firms.
And the damage has run into the billions at several firms.
But yet, during the past two weeks we’ve begun to see the stocks of banks and brokers begin to RISE.
How can they be rising with all this bad news?
Are they going up because all the bad news is out?
Maybe it’s because interest rates seem to be going lower?
Is there another reason why these stocks are climbing?
Again, different story from the previous message, but the moral of this story is still the same: don’t rely on the media for investment advice. The unemotional point and figure charts only track what’s in demand and what’s in supply. This gives us an extremely accurate picture of where our money should be invested today.
Mullooly Asset Management LLC
Our Only Business Is Fee-Only Investment Advice