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Chuck Schwab Hurting the Broker/Dealer Index

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Charles Schwab announced today that average daily trade volume fell 11% to 219,000 trades per day compared to the same month last year, and was 7% lower than last month. That data, as well as today's overall selling pressure has the Securities Broker/Dealer Index (XBD.) lower by 2.52%.

Broker/Dealer Daily Chart

With the 500 level now lost, XBD looks to be nesting just above 477 level. Since both moving averages are out of the picture, the 61.8% retracement level at 456 looks to be the safety valve if XBD continues to fall further.

Charles Schwab Point and Figure Chart

After an impressive run in April, Charles Schwab (NYSE:SCH) consolidated between 21 and 19 for the better part of May. Supply finally won the standoff, and flashed a quadruple bottom sell signal. Today's drop has also broken the bullish support line. Looking at the rest of the chart doesn't reveal a lot of support levels, so SCH is going to have to pull itself up by its own bootstraps.

Premier Markets Play Update

Dropping coverage of ISSX at $41.61.

Added an additional half position in ABXGC at $2.75, when ABX traded above $17.50.

Jeff Canavan
Assistant Analyst

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