Financials

I really don't get how banks have been able to get away with posting loan loss reserves (releasing them for earnings only and then back they go to loan loss reserves), specifically JPM this morning, but nearly every bank that has reported over the last few years has made tight earnings by releasing loan loss reserves.

JPM released $950 mn from loan losses, $550 min from credit losses, $600 mn from litigation reserves for $1.4 billion in "revenue" added to Q2, that's about $.33 EPS for Q2 just in released reserves, you have to look a little past the headline number or news.

Additionally their trading operations fell off badly, net margin interest was the lowest ever and mortgage production was significantly down.

On a separate note UPS (as I think of UPS and FDX to be the new "Transports"as far as Dow Theory is concerned as we have shifted from an industrial to a services economy ) has gone ahead and guided lower, significantly lower this morning.

As for Financials and JPM, it is early, but there are some indications in place already from previous days.

XLF-Financial Sector

 This is early non-confirmation of price off the open in the group as a whole.

This is the 5 min chart and one of the indications I said was already in place, leading negative, which has migrated to the 10 min chart.

10 min Chart of XLF.

JPM hasn't confirmed yet, it is close, but no dice an hour in to the day so this will be an interesting one to watch.

Note JPM's 10 min divergence looks just like XLF's.

WFC had a positive/accumulation (1 min) yesterday early, but it too failed to confirm.

FAZ already has the longer charts in place, it's simply in need of the intraday or "timing" charts to jump in line.