US financial stocks sold down again

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)