Prompted by fear of nationalization, investors sold down US financial stocks yesterday (go here). The Philadelphia Bank Index ('BKX') broke below the January low of 25.
Chart 1: BKX's daily chart as at Feb 17, 2009 (source: Stockcharts.com)
Renewed fear of more trouble ahead for the financial sector & the economy as a whole, could send the DJIA to test its November 2008 low of 7500. We can only hope that the DJIA will rebound from the 7500 level; thus putting in a successful 'test of the low'. With all the negative newsflow, it is quite doubtful that the outcome would favor investors who take the long position in the market.
Chart 2: KLCI's daily chart as at Feb 17, 2009 (source: Stockcharts.com)
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