What’s Good for Goldman is Good for America
Technical analysts have been following Goldman Sachs as a leading indicator for the US stock market. It makes intuitive sense that investment banks must do well for the overall market to do well.
So, it turns out that recent weakness in the i-banks is a bearish signal. GS broke below its 200-day moving average (about $160) a couple weeks ago. Many investors use the 200-day moving average as a barometer of stock market vitality – when things trade below the 200-day m.a. the market is exhibiting bearish symptoms.
Chicken vs. egg? I agree, but it’s an indicator worth keeping in your bag of tricks.
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