Banking Index Blues

With the weakness showing up again today in the SPX I thought it would be a good idea to post the S&P Banking Sector Index to what it's chart might be telling us.

So far it's created a "V" bottom which, if it holds, would be somewhat uncommon. More common is a double bottom or reverse head and shoulders pattern which gives the price a chance to retest prior lows. After the huge beating the Bank Sector has had, it could certainly continue to rally and hold, but watch that upward trendline carefully as a break could signal the start of another leg down. News wise there still seems to be some possibilities of knocking it down again.

The Banking and Broker/Dealer Sectors are important components of the S&P 500 and "their" direction often steers the direction of the S&P 500.

The next upward target might be the 100MA at 210 which is also close to the 61.8% retracement of the plunge that started at the beginning of May.

On the daily chart the Banking Sector has put in a higher high, we now just have to see if the trendline holds to give it a higher low or if this may be the start of consolidation or another leg down.

S&P Banking Sector Index Daily Chart ($BIX)