Shares of Goldman Sachs (NYSE: GS) made another new low on Monday, yet another
sign that caution makes sense in this market.
Chart Courtesy of StockCharts.com
Goldman Sachs shares are out of favor. That usually means that the momentum and inside Wall Street crowd is being careful. When those who trade Goldman are cautious, it's not a bad idea to follow them.
No matter what you think of the company, especially after 2008, Goldman shares are still a good predictor of what the overall market is likely to do in the intermediate term. And right now, they aren't giving us much confidence.
The new low in the stock does come with a few caveats. One is that volume remained fairly steady during Monday, as the stock slipped lower. The other is that despite a new low in the price, both the RSI and the MACD indicators did not make new lows.
The latter occurrence is often a bullish sign. It is not a reason to rush out and buy Goldman or any stock, though. But it is a reason to pay attention.
At some point this market is going to move back into an intermediate term up trend. We want to catch that train early.
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