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BUZZ-Dow's financial components have a lot baked in
March 13, 2017 / 4:14 PM / 6 months ago

BUZZ-Dow's financial components have a lot baked in

** The DJI's financial constituents, as a group, have had quite a run since election-day close; however, a composite index of the group has neared significant chart resistance and is ripe for a downturn. Chart: reut.rs/2ng9fjS

** DJI financial constituents include American Express , Goldman Sachs, JPMorgan Chase and Travelers; (DJI component Visa within S&P 500 tech sector)

** Financials best performing SPX sector since election-day close, up 24 pct; however, Dow’s 4 financial/banking giants as a group, outperforming the broader sector

** Composite index up 27 pct over this period, and responsible for just over 30 pct of DJI’s rise

** That said, the composite recently neared a wave equality proj as well as a 17-year monthly resistance line; has since stalled. Chart:

** Mar high so far 556.62, about 1-3 pct shy of 565.52 proj level and 17-year resistance line (now 573)

** Meanwhile, monthly RSI showing longer-term divergence; late 2016/early 2017 levels yet to exceed highs reached in 2013/2014

** Thus, despite excitement over what appears to be a baked in Mar Fed rate hike , key sector within Dow ripe for sell back

** Fits with similar signals from SPSY and Financial Select Sector SPDR Fund ; and an overall market that is showing wear

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