Philly Bank Index (101.44)

In late November 2005, I was looking for a flat trading range with resistance in the 105 area and support around 92.50. Since then we have built a deliberate top below 106. In the past few days we have witnessed a nosedive.

Now we seem poised for a bounce in an otherwise steep correction, and to me the obvious short term support area from which to launch such a knee-jerk reaction would be the 100 area. Round numbers (especially 100) are not often ignored. As it turns out, the 200-Day Moving Average could also lend short term support. It currently stands at 99.76 as I calculate it.

A reasonable bounce here would be nice, but beyond that I see a real head of steam ready to carry us down through an intermediate term correction lasting at least four weeks.