The performance of the Banks, has ripple effects on the overall economy and the markets. The Bank index lost almost 5% last week, while the 500 index gained .95%. Important pattern created in the Bank Index over the past 14 months? See below.
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Bank Index may have created a “Head & Shoulders” topping pattern, with the head hitting the 38% retracement level, after the Financial challenges of 2008. Keep an eye on line (1) in the chart above, which has the potential to be the patterns “neckline.” The neckline IS NOT BROKEN at this time, does represent support.
Should support give way, banks might have a few more challenges on their hands!