Banks are Fast Approaching a Critical Decision Point
- Posted by JC Parets
- on December 5th, 2012
“A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.” – Robert Frost
Today’s Chart of the Day is the KBW Bank Index. You want to talk about show me time? This chart below shows us that a major directional decision is about to be made in a very important space for the US Equities market.
We know what happened to banks during 2008. What sometimes gets forgotten is just how powerful that move was off the early 2009 lows. We as technicians have these charts pretty much engraved in our brains. But in casual conversations with investors, I’ve noticed that the monster move in banks during 2009 often gets lost in the shuffle. This move was so powerful, in fact, that it has taken two and half years to consolidate those gains.
In the chart above we can see that prices for the KBW Bank Index have been trading within a range in between two converging trendlines. The question we need to ask ourselves is whether the breakout will occur to the upside, or if prices rollover and breakdown as it approaches the apex of this pattern. I have a feeling that the decisive move will be the beginning of a much larger directional trend.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.blog comments powered by Disqus
J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He is a 10-year veteran and Market Technician who actively manages money incorporating Technical Analysis and Behavioral Finance into his practice. JC’s work has been featured regularly on CNBC, Fox Business, Bloomberg, Business News Network, Wall Street Journal and Yahoo Finance among many other financial media outlets. More...
- The Chart The Whole World Is Watching
- Crude Oil To $70 In the Second Quarter?
- Fox Business: Social Media Stocks Break Out
- CNN Money MarketMadness Stock Challenge
- Social Media Stocks Are On Fire
- About That Outperformance From The Dow Jones Transportation Average
- Some Thoughts On The US Dollar
- Small-Caps Could Be Emerging As New Leaders
- Taking The Time And Avoiding Shortcuts
- Is Twitter Stock About to Break Out?
Archive by Year