The Bank Index BKX has been trading in a downtrend since early 2018.

And it has been underperforming the broad stock market indices as well.

Is the bad news for banks stocks about to end?

Stock market bulls sure hope so, as the stock market tends to be on stronger footing when the banks provide market leadership.

Today’s chart looks at the ratio of bank stocks to the broad market index, the S&P 500.

The Bank Index (BKX) to S&P 500 Index (SPX) price ratio recently hit 7-year channel support and a small rally has followed.

If a breakout at (3) takes place, looks for relative strength from the banks again. This would also be a positive signal for the broader market.

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