Tuesday, April 15, 2008

Financials Testing Critical Support Level

This morning, State Street (STT) reported a $3.2 billion loss on its investment portfolio and an additional $2.5 billion loss on conduits, then was placed on Ratings Watch Negative by Fitch Ratings, signaling that Fitch will review the company’s credit rating for a possible downgrade.

While the State Street news put a damper on financial stocks, XLF, the most widely followed ETF for the financial sector, is trading up as a write this. Earlier in the session, XLF tested an important March 31st low of 24.40 (see chart below) and has since bounced back. The 24.40 level is an important support level for the XLF and one to watch closely, particularly as tomorrow brings additional earnings reports from J.P. Morgan Chase (JPM) and Wells Fargo (WFC), as well as several smaller banks.

1 comments:

Bill Luby said...

For a more detailed look at XLF, check out XLF Update from Bob at bzbtrader

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