You are likely to hear a lot of noise this week about the mortgage-title problem. Normally, I would say that this shouldn't be a problem as it will get resolved.
However ... attorneys are getting into the act, and Washington politicians may jump in this week as well.
Why? Because there is an election coming up, and that could send many politicians into the mortgage-title scramble looking for votes and to be heard ... and they could create an enormous problem if they interfere.
One would expect that this would create pressure on financial institutions, so today we will look at the Banking Index chart today.
As you can see on today's chart, the index broke below a support line on Friday. But, at the same time, its Ultimate Oscillator hit an oversold level at label 6. So that may keep it in check for the next couple of days. On the upside, the Banking Index has issues to contend with such as its formidable resistance at 49.28.
Bottom line for this week: There could be a downside danger this week on the Banking Index if Washington decides to make the mortgage-title problem an election issue. If they do, then keep an eye on the 42.71 support level. If it is violated, then the Banking Index could fall to test its 41.43 support. If that should happen and fail to hold, then the likelihood is that the financial sector will be in big trouble and that would put a hurt on the market's rally.
http://www.stocktiming.com/Monday-DailyMarketUpdate.htm
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