It is on my my mind that we’re seeing 2007 all over again in the financial sector stocks.
During the pullback in the SPX since January, housing stocks and the bank stocks have been breaking support and beginning to “stair-step” down (see the chart below), led to the a possible 2008 cellar by DB and now with GS (a bellwether, no less) following suit.
The rest of those I follow – JPM, BAC, WFC, USB – are sitting right on support. It the market takes another hard hit (like tomorrow?), they could all be in solid downtrends.
Needless to say, as the banks and the general market tend to feed on each other in up trends, they can also eat other alive to the downside too.