Banks Are Looking At A Critical Test
Chris Kimble | Nov 12, 2019 01:51PM ET
If the saying “So Goes The Banks, So Goes The Broad Market” is true, banks are facing a critical breakout/resistance test in my opinion.
This chart looks at Financials ETF (NYSE:XLF) over the past 12 years. The chart shows that a double top took place prior to the financial crisis getting started.
The Financial Select Sector SPDR has remained inside of rising channel (1) since the lows in 2012. It hit double resistance at (2), then it declined nearly 25%.
The decline then tested rising support at (3) and a strong rally has followed. The rally now has XLF nearing the financial crisis double top and last year's highs at (4).
Will XLF breakout above the old highs or is it creating another double top again?
What XLF does at (4) could well send important messages to the broad market and stocks around the world. Stay tuned, friends, this looks to be a key price test.
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