While the uptrends in the major indexes are holding up well, it's been a tale of mixed signals beneath the surface.
Some sectors and groups are showing strength, while others continue to lag behind.
Banks, for that matter, are an important piece of the puzzle. They are the backbone of the financial sector. They are some of the most important businesses for the US and global economy.
How bank stocks perform gives us a good read on where the broader market is headed.
The SPDR S&P Banks ETF $KBE took a shot at breaking out of this monster base following November’s election. This marks the second attempt at reclaiming its pre-GFC highs in the past few years.
But here we are today, with that breakout failing once again as KBE gives back all its post-election gains.
KBE has fallen back into its old range and is currently sitting below a key resistance level.
That 61 area is a big deal. That’s my line in the sand.
As long as KBE stays below it, there’s a heightened chance we see more sideways action or even further downside for the banks.
However, if it can get above that shelf of former highs and stick the landing, I would consider it super bullish for financials and the broader market.
If and when we reclaim 61, I would like to have a lot more bank exposure.
I’d greatly appreciate your help in spreading the word!
