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Brokers Broke

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Brokerage stocks are suffering today after Charles Schwab announced on Friday that it is likely to cut more jobs this year due to weak trading volumes.

Securities Broker Index Daily Chart

The news has Securities Broker Index (XBD.X) down .55 percent. Not a big drop, but with support sitting 3 points away at 456, any drop could be big. Should the index be able to hold, it could mount a small bounce that could test the 480 area that contains three points of resistance.

Charles Schwab Daily Chart

Charles Schwab (SCH) hasn't been performing well since May, but today's 74-cent drop has the stock below its April low at $13.14. It is trying to bounce of the lows to close above support, but it doesn't look promising.

E*Trade Daily Chart

Fellow online broker E*Trade (ET) is down 21 cents, or 3.41%. E*Trade was trying to complete a head and shoulders bottom, but failed to crack the neckline at $6.75. Since then the 50-day moving average has been pushing the stock lower, and has taken out recent support at $6.05. The low of the left shoulder is $5.85, and might be E*Trades last support level.

Jeffrey Canavan Assistant Analyst

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