In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Banking on Support
Banks, broker-dealers, and capital markets have all been underperforming despite the rising rate environment. The entire financial sector has been a disappointment since last year.
When it comes to banks, the Regional Banks ETF is an excellent indicator to measure risk appetite. When times are good, these stocks are participating.
As you can see in the chart, price is currently holding above the AVWAPs from the 2018 highs and 2020 lows. This level represents a logical potential support zone.
Notice in the lower pane that momentum (as measured by the 14-period RSI) never reached oversold conditions during the current correction. Not many industry groups can say the same.
As long as this economically sensitive group remains above this confluence of support, it is a positive for the overall market.
