So goes Financials, so goes the Market
We have all heard that saying. We all can see the "Financial Sector" is right up their as the largest sector of the SP500. So is there any truth to the saying? A picture is worth, well in this case loss avoidance or profit!
The first chart is comparing the last two years.
It does not take a rocket scientist to see that the two are highly correlated and in the past two years of economic recovery this is the largest divergence between the two. Who is wrong, Financials or SP500?
Now a one year chart
The divergence has developed over the past six months.
so let us look at the last six months.
So for the first three months the Financials lead the market higher and since have collapsed. The question is is the Financial sector leading the market again? If so, let us hope it is not as steep as the financials have.
Conclusion: Ignore history at your own risk.
The first chart is comparing the last two years.
It does not take a rocket scientist to see that the two are highly correlated and in the past two years of economic recovery this is the largest divergence between the two. Who is wrong, Financials or SP500?
Now a one year chart
The divergence has developed over the past six months.
so let us look at the last six months.
So for the first three months the Financials lead the market higher and since have collapsed. The question is is the Financial sector leading the market again? If so, let us hope it is not as steep as the financials have.
Conclusion: Ignore history at your own risk.
Posted by Bradley Fluetsch at 6/6/2011 8:24 AM 
Categories: Speculation
Tags: stock market equity return financial sector expectations retirement history trends
Categories: Speculation
Tags: stock market equity return financial sector expectations retirement history trends
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