World needs leading sector to get “Legs” now, say Joe Friday

joe friday pic

In 1983 the rock group ZZ Top released the song “Legs,” which became a big hit. I am reminded of this song today, as we look at the pattern in the Bank index and the S&P 500. Below compares the performance of the S&P 500 and banks since the highs in 2008.

When Banks lost footing in 2008, they and the broad markets headed south together. As you can see below, they both bottomed at the same time back in 2009, during the financial crisis.

spx bank index need to get some legs july 15


A week ago today, Joe Friday shared that banks in Europe and Italy were testing key support levels and that if support would hold, the broad markets would like it in the states. See post HERE

performance spy eufn ewi 5 days july 15


Last week Joe Friday shared that the risk on trade needed banks in Europe to rally and if they did, it would be a plus for stock markets around the world. For sure the S&P has a nice rally over the past 5-days. As you can see the hard hit bank ETF from Europe over tripled the gains of the broad markets in the states.

Joe Friday Just The Facts; Banks around the world continue to create a series of lower highs. The Risk On trade needs banks to “get some legs” and break above falling resistance, to help the S&P continue to hit record highs going forward.

Govt Bonds (TLT) – Peaking as it kisses the underside of resistance?

man being kissed several times

The Fed over the past year has continued to hint, that they would raise interest rates. Billions of free thinking people have NOT bought into this theme, as they have pushed yields lower and bond prices higher and higher.

Below takes a peak a 20-Year bond ETF (TLT) over the past decade.

tlt testing underside of 10 year resistance july 14


No doubt about it, TLT remains in a 10-year rising trend, highlighted by channel (A).

The nice rally in TLT this year, has pushed it up to the underside of rising channel (A). At this time it is actually kissing the underside of two potential resistance lines at (1) above.

TLT is attempting to breakout, as it is kissing the underside of channel resistance, for the 4th time in the last decade. As it is kissing resistance, weekly momentum is now reaching lofty levels.

Is it possible that the S&P 500 could be breaking out to new highs and bonds could be peaking at the same time?

No doubt about it, from a Power of the Pattern perspective, TLT finds itself at a very interesting price point at this time.

If TLT would happen to peak and stocks rally, mean the world didn’t come to an end over Brexit?

Could Brexit be as important as Y2K? 


Silver- its outta here, breaks above large bullish wedge pattern

your outta here ump throwing coach out

Sometimes if your a baseball coach, you want to get thrown out to fire up the players.

When it comes to bullish falling wedges, you want the asset to “Break Outta” of the top of the pattern. Below looks at Silver over the past few decades.

silver busts outta bullish falling wedge july 13


It took Silver a while to form a multi-year falling wedge, with the apex of the wedge taking place at the bottom of 25-year rising support.

Of late Silver broke outta and above the bullish falling wedge and continues to push higher at (1) above.

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