BAML: Here comes the big bank breakout

I’ve been talking about the idea that banks would / should lead the market into the next leg of the rally for a few weeks now. It appears that this breakout for the big bank stocks – which had been trapped at resistance since July – has already gotten underway. While most traders reference the XLF financial sector SPDR ETF when talking about bank stocks, the KBW Index is really the grandaddy, the old school traders’ standard.

Here’s BAML’s ace technical strategist Stephen Suttmeier with an important call on that index:

The KBW banks Index (BKX) is consolidating within the rising channel from late 2012 and is set up for a breakout that would set up a rally to channel resistance at 74-75. A break above 67 for the BKX would would complete the bullish consolidation…

Also, a steepening of the yield curve (10-year Treasury yields minus 2-year Treasury yields) tends to coincide with stronger relative price performance for the BKX vs. the S&P 500.

Here’s Stephen’s chart of the yield curve vs the BKX : S&P 500 ratio:

bkx breakout

 

If this breakout does occur, he likes the charts of JPM, WFC and C the best in the group as they’ve all consolidated, held important support levels and are set-up to go.

Source:

Chart Talk – Bank of America Merrill Lynch

What's been said:

Discussions found on the web
  1. Golden Eagle homes commented on Sep 25

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2013/11/20/baml-here-comes-the-big-bank-breakout/ […]

  2. 메이저놀이터 commented on Oct 18

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2013/11/20/baml-here-comes-the-big-bank-breakout/ […]

  3. axiolabs avis commented on Oct 22

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2013/11/20/baml-here-comes-the-big-bank-breakout/ […]

  4. td easyweb ca login commented on Nov 10

    … [Trackback]

    […] Here you can find 13194 more Info on that Topic: thereformedbroker.com/2013/11/20/baml-here-comes-the-big-bank-breakout/ […]

  5. bank of montreal online commented on Nov 24

    … [Trackback]

    […] Find More on to that Topic: thereformedbroker.com/2013/11/20/baml-here-comes-the-big-bank-breakout/ […]

  6. Click Here commented on Dec 11

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2013/11/20/baml-here-comes-the-big-bank-breakout/ […]

  7. devops consulting commented on Dec 16

    … [Trackback]

    […] Find More Info here to that Topic: thereformedbroker.com/2013/11/20/baml-here-comes-the-big-bank-breakout/ […]

  8. Regression Testing commented on Dec 20

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2013/11/20/baml-here-comes-the-big-bank-breakout/ […]

  9. rbc royal bank commented on Dec 24

    … [Trackback]

    […] Read More Information here on that Topic: thereformedbroker.com/2013/11/20/baml-here-comes-the-big-bank-breakout/ […]

  10. Digital Transformation solutions commented on Feb 05

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2013/11/20/baml-here-comes-the-big-bank-breakout/ […]