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At this time the trend in banks is UP, as they are above key long-term moving averages and support lines. Noting bearish has taken place in this sector so far.
I am keeping my eyes on the patterns banks have formed since the first of the year though. Both the Bank Index (BKX) and Regional Banks ETF (KRE) “May” be forming a head & shoulders topping pattern with a bearish wick taking place this past week at the potential right shoulder.
This pattern is NOT proven at this time, yet if the read would happen to be correct, it could become important to the banking sector and potentially the broad markets.
What would break the potential bearish message in the banks? A simple move higher, above the head would negate the pattern. Stay tuned here to see if the Banks will send a key message to the stock market.
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