There used to be an old adage in the stock market..."so goes the financial stocks, so goes the market." Given their almost 20% weighting in the S&P, the conclusion that the financials drive the performance of the S&P is a reasonable one. When the markets collapsed in 2008, the financials led the way and when the markets came back from the brink in 2009, the financials roared out to the lead. Personally I like the financials for a long play but not focusing on the sector as of now.
In terms of going forward in this sector, the
BKX has essentially held the key 13 month moving average and any extreme move beyond or below it, has been met with sellers or buyers. This month has featured a turn higher in the candle chart above the 13 month. This bullish reversal confirms the move in stock prices from the lows.
NOw if the
BKX could only get over the 50 level solidly, we could see a bigger financials and S&P rally.
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