Most quality rallies in stocks have historically taken banks along for the ride. Up until a couple of months ago, banks had been a disappointment to many, lagging the broad market for the prior 18 months.
Below looks at the Bank Index KBW Bank over the past decade, revealing why we think that banks have an important “Breakout Test” in play at this time.
The Bank Index has remained inside of a rising channel since late 2009. The index looked to have formed a pennant pattern, creating a series of higher lows and lower highs. When the index broke out, Our members bought Financial ETF (NYSE:XLF) at (1) back in August.
The Bank Index now appears to be testing a “Triple Breakout” price zone at (2), which is currently in play.
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