CLICK ON CHART TO ENLARGE
Banks had much to do with the broad markets decline during 2007 to 2009, as the Bank Index (BKX) lost over 80% of its value. In 2012, the inset chart reflects that the BKX index gained almost twice as much as the 500 index.
Over the last three years, the Bank Index could be forming a bullish inverse head & shoulders pattern. The potential neckline (1) continues to be important falling resistance since 2010. If the pattern read happens to be correct, a break of the neckline would be a positive for the index and the broad market.
Will Banks pull the broad market higher in 2013? I would want to own them if a breakout takes place!