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Banks have lagged the broad market since the first of September. Of late, the banks have reflected relative strength. Bank Index is up over 3% the last two days, up 10% this month! Many are concerned about the banks, yet from a price perspecitve, they have to be respected in many ways should they breakout at (2) in the chart above. A bank breakout should signal that the 500 index will take out Fibonacci resistance.
Game Plan…Buy XLF with a tight stop of just 3%.
P.S. Russell 2000 (IWM) continues to reflect positive relative strength!