• 287 days Will The ECB Continue To Hike Rates?
  • 287 days Forbes: Aramco Remains Largest Company In The Middle East
  • 289 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 689 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 699 days Big Tech Disappoints Investors on Earnings Calls
  • 700 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 702 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 706 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 707 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 709 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
Trade In Counterfeit Goods Hits Half A Trillion Dollars

Trade In Counterfeit Goods Hits Half A Trillion Dollars

The counterfeit market has breached…

Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

  1. Home
  2. Markets
  3. Other

Watch the Banking Index

Institutional Investors have one special index that they look to when trying to measure the strength of the economy.

What's the Index and why do they favor it?

It is the S&P 500 because it is the index with the broadest array of sectors that give a clear composite view of economic conditions.

Take the Financials for example. They have been hit hard, have needed Government bailout money, and are more than likely over valuing their assets at this point. So this has been a sector in turmoil and because it is an important part of the S&P's makeup, it has an influence on the S&P's trending and strength.

How much of the S&P 500 is made up of Financial stocks?

The answer: 10.81% (The percentage and breakdown of the other sectors can be seen on the chart below.)

Okay ... Financials are important relative to the action of the S&P 500.

What is the Banking Index doing now? (Symbol: $BKX)

Is it trending up or down?

Is it helping or hurting the S&P 500?

Is it at an important juncture now?

Here are the answers with the chart below:

1. The Banking Index is trending up, so it is helping the S&P. It started its up trend the week of March 9th.

2. Is it at an important juncture now? The answer is yes as seen on the chart. Note that the Banking Index is showing a short term down movement, but that movement will soon be approaching a major support line.

More importantly, the pattern now is a triangular pattern. Note how the index has touched the upside resistance 3 times so far. In fact, the third (and current touch) shown was at 10 AM this morning.

What is clear about this hourly chart, is that the intersection of the resistance and support is close at hand.

It is at that point, that the Banking Index has to break out of the triangular pattern. When that happens, it will have an impact on the market and the S&P 500's direction.

 

Back to homepage

Leave a comment

Leave a comment