JPMorgan Chase & Co. (NYSE:JPM) has pulled back over the last week as yields have fallen sharply after the horrible jobs report. Always remember, after Dodd-Frank, banks are not able to make the same money they used to and must rely on loaning money. This means higher interest rates are very important for bank stocks. The lower interest rates go, the lower financial stocks will go.
As noted on the chart below, JPMorgan Chase is showing weakness as it has fallen into a key trendline. As long as this trendline holds, the stock is not in freefall, however, should the stock close below this line, a breakdown will occur that will take JPMorgan Chase to $59.30, then $53.00. Watch this line carefully, it is an epic level that every investor should be following.
Goldman Sachs Group Inc (NYSE:GS) has broken a head and shoulder neckline. Head and shoulder patterns are bearish and when the neckline is breached, a large drop is at hand. The whole financial sector looks extremely weak and head and shoulder patterns are everywhere.
Citigroup (NYSE:C) is another great example but has yet to cross its neckline. The neckline is the trigger for the epic downside move to target. With so many horrid chart setups in the financial stocks, it is likely something big is on the horizon that will cause a quick, sharp decline to target. Goldman Sachs downside target which is calculated precisely, is well below $140.00. Look for sharp declines in the coming weeks on all financial stocks.
Steel Dynamics, Inc. (NASDAQ:STLD) has been surging higher on the back of better commodity prices and short covering. The stock hit a low of $15.35 in January 2016. Today Steel Dynamics traded to $26.99.
If you look at the weekly chart below, there is an up-sloping trend-line that connects through major pivot highs going back to 2010. A trend-line that stretches this far back will have a serious impact on Steel Dynamics ($STLD). Look for the stock to pullback 10-20% from this level. Steel Dynamics is a sell (short) at $27.40.
InterCloud Systems Inc (NASDAQ:ICLD) has a history of meteoric runs. The stock ran from $1.45 to $4.75 approximately a year ago. $ICLD may be setting up for another one of these moves. Obviously, any micro stocks like this carry risk but the upside reward is big as well. Note the trend lines on the chart below. The stock price is just below them. A daily close above $0.85 potentially sets it free. An upside pop to $1.50 would be likely, perhaps more with momentum buyers. Keep it on watch.