For the third consecutive day the Dow and S&P closed lower with caution prevailing in the market as new signs suggested the economy may be heading into a period of weakness.
Although consumer sentiment hit its highest level since January 2008, new orders for U.S. manufactured goods dropped by their biggest amount in seven months and new home sales rose less than expected.
Is this the start of a bigger correction?
For a trader, timing is everything and if you’re early you’re wrong, says Guy Adami. I was early so I’ve been wrong. But with that said I still think the market is heading lower into October. The reversal we saw this week on a Fed day was very bearish.
I can't agree with that entirely, says Karen Finerman. We had weak housing data and bad manufacturing numbers on Friday but the market performed reasonably well. That's bullish.
Personally I expect to see 1200 on the S&P by the end of the year, adds Steve Grasso. It seems that a lot of investors expect October to be horrific so they’re sitting on the sidelines. But when its passed money should come into the market.
Lately, every time we've taken out resistance in the market it's becomes support, explains Joe Terranova. Therefore, I'm watching 1010 – 1015 on the S&P. If we bounce it's bullish and if we break lower it's bearish.
What do you think? We want to know!
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FINANCIALS ROLLOVER FOLLOWING GOLDMAN'S INTRADAY REVERSAL
Investors are wondering if bank stocks will hold their gains after bellwether Goldman Sachs rolled over and broke below $180 after making a 52-week high earlier in the week.
What’s the trade?
The Goldman reversal was a little bit startling, muses Guy Adami. Personally, I’m looking for a move lower. I think we see the stock trade in the $160’s.
Perhaps investors just think it’s a good time to take profits, muses Steve Grasso of Stuart Frankel. Also a headline crossed that suggest Goldman may pay more bonuses in the form of stock. Investors may interpret that as dilutive. But I wouldn't read more into it.
If I had to take a position in Goldman it would be long, adds Karen Finerman, because I think the market trades higher through the end of the year and Goldman should go with it.
And from the Halftime Report... patterns in the charts of the XLF suggest to me there’s still upside in banks, adds Bill Strazullo of Bell Curve. I wouldn’t throw the towel in yet. However, if the XLF slips below $14 then I’d be concerned.
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