STOCK INDEXES STABILIZE -- FINANCIALS REBOUND -- BANK INDEX TESTS MARCH LOW

STOCK INDEXES STABILIZE NEAR SUPPORT... After a weak start this morning, major stock indexes are stabilizing near some short-term support levels. Chart 1 shows the Dow Industrials finding support at its 50-day moving average and its mid-April intraday low at 22900.   Chart 2 shows the S&P 500 holding support at 2797.  So far, those support levels have kept the selling from becoming more serious.  Chart 3 shows the Nasdaq Composite Index trading slightly lower, but trying to stabilize at its 20-day average (green line).   Seven sectors are in the green today with financials in the lead.  Bank stocks are finding support near previous lows.

Chart 1
Chart 2

BANKS TEST MARCH LOW... Beaten-down financial stocks are rebounding.  Chart 4 shows the Financial SPDR (XLF) gaining 2% today with banks in the lead.  Bank stocks are testing some pretty important support levels.  Chart 5 shows the KBW Bank Index trying to stabilize above its late March low.    A drop below that March low would put banks at the lowest level in four years.  That's an important test for them and probably for the rest of the market.

Chart 4
Chart 5
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