By popular demand, another look at the Goldman Sachs (NYSE: GS) chart-- to provide insights into the plight of the financial sector and its Financial Select Sector SPDR (AMEX: XLF). Let's notice that GS remains under its Aug-Oct support line, which was violated yesterday at 225.00 and which still presents serious resistance to any rally effort.

Today's action, though mostly sideways, represents a digestion period -- a bearish digestion period -- in the aftermath of the plunge from the 10/31 high at 250.70 into yesterday's low at 212.80. My near and intermediate-term work argue for more downside after this "rest" period is complete, which should press GS to 200.00-196.00 next. Only a sustained climb above 225 will compromise my still negative near-term outlook.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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