Are Bank Stocks Nearing Reversal of Fortune

The Bank Index INDEXNASDAQ: 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.

Something to watch and consider. Stay tuned!

Bank Index (BKX) to S&P 500 Index (SPX) Ratio Chart

bank stocks breakout broader market bullish performance signal chart image september

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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

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