Stocks, generally beat up, but not quite ready to throw in the towel

The S&P and Dow are in downward sloping wedge patterns that has been clearly apparent since early September. The Nasdaq Composite is just barely bearish. Its September 22 high is just a little higher than the October 10 high. But, the October 11 plunge was similar in all three indexes. It’s the same for the sideways move since October 11. In sum, it certainly does not look anything like a bullish market, or even a market about to become bullish. But there is still too much demand to prevent a bigger fall then we have seen so far.

The Finance Group is the only strong group in my table of relative-strength stock-market sectors; The Cyclicals and Consumer Staples groups lost strength while the Technology group was just a little above flat. The Banking Sector is the strongest in October; it gained 5.2%. But these stocks are just as hollowed out from their fundamentals as were the technology stocks I presented in the last few weeks:

Symbol  3 Yr Sales Growth  Current Yr EPS Est.
BBD -30% -75%
USB 2% 3%
FITB -4% 2%
KEY 1% -2%
HBAN 4% -6%
ITUB -23% 0%
RF 1% 9%
MS -1% 10%
JPM -1% 1%
WFC 2% -2%
BAC -3% 12%

The average 3-year sales growth rate of this group is -4.7% and the average EPS estimate for the current year is -4.4%. If this is an example of our best and strongest, what must our bottom-feeders look like?

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