Let’s keep things simple in what is otherwise becoming a more complex market filled with divergences and wild indecision.
Goldman Sachs undoubtedly reclaimed its title of being a sexy stocks over the past few months with its steep, daily climb higher. After a certain point, the chart became too good to short, but too good to go long as well given the abnormal angle of ascent. The colorable argument was and is being made that Goldman is our true market leader here, an excellent proxy for the major indices.
If that is the case, then this morning’s action is a bit concerning for bulls, with Goldman finding resistance now at its 20-day moving average and lagging the rest of the tape. It may seem primitive to simply say, “Goldman led us higher and now that it is slumping it is surely leading us lower,” but there is something to be said for understanding that momentum cuts both ways.
Of course, we could also be seeing a “lock ‘n roll” market rotation away from extended leaders down to coiled up secondary breakout plays. Nonetheless, given Goldman’s impressive price action since late-last year, I am watching whether the indices can shrug off its weakness into the afternoon.
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also fcx has been weak but i think you put less emphasis there than you used to-