Watch the Banks!!!
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Banks have lagged the broad market since the first of September. Of late, the banks have reflected relative strength. Bank Index is up over 3% the last two days, up 10% this month! Many are concerned about the banks, yet from a price perspecitve, they have to be respected in many ways should they breakout at (2) in the chart above. A bank breakout should signal that the 500 index will take out Fibonacci resistance.
Game Plan...Buy XLF with a tight stop of just 3%.
P.S. Russell 2000 (IWM) continues to reflect positive relative strength!
Chris…are ETFs really safer than actual stocks? I mean, if banks are going to move up, why not just go with GS, the best of all?
Is there also a bearish descending triangle?
This could be big!
cK…could be a big head and shoulders with (2) being the right shoulder. Right now with the strong action of the banks recently, the right shoulder doesn’t seem to be the case. This is why I shared I wanted a tight stop on this new position.
Mike…usually safety in numbers. A person can go with one stock, maybe hit a home run or could have number like Citigroup.
Thanks Chris. I definitely agree with you that in order for the S&P to break through fib, the banks have to be the driver behind it.
tz…In the past, a breakout in banks and a breakout in Copper, hasn’t been bad for the markets or the economy. Copper has made a run at key resistance for the past 4 YEARS. A breakout should have some positive ripple effects for the global community.