blackrockblackeyebreakingsupportapr16CLICK ON CHART TO ENLARGE

Rumor has it that Blackrock (BLK) has a few assets under management. This morning BLK is down a couple of percent in price. No big deal other than it could be making a run at breaking support today.

Do you believe the “So goes the banks, so goes the economy and interest rates?”

Below is a look at the Financial/S&P 500 ratio. It is forming a multi-year pennant pattern and has been weak the past few years.

financialspyratiolargepennantpatternapr16CLICK ON CHART TO ENLARGE

If the ratio breaks out, it would be a positive message for banks and could suggest interest rates could be headed higher. On the flip side a breakdown here could suggest continued financial softness compared to the broad market and that interest rates are under no pressure to move up.

Are you wondering what you should do right now? ¬†Well you are not alone. The table below shows the highest “Neutral” level from AAII in the past 12-years.

aaiineutralhighapr16CLICK ON CHART TO ENLARGE

 

Humbly I am of the opinion what the Financial/S&P 500 ratio does going forward will give us a ton of clues to portfolio construction going forward!

 

 

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past