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.
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.