Financials – it’s pretty much all that matters – right now

they lead us UP and they lead us DOWN. the banks, financials … it’s that simple.

that being said, the move since March 2020 has been strong and straight up .. kaboom that’s a face ripper higher and, frankly, caught me off guard. why?

well … the ZIRP, the multiple trillions (yes I just typed MULTIPLE trillions) of sovereign debt is beyond anything that we could EVER imagine. folks we are in unchartered territory. again, we are in the vapor ware of experiential historical construct and, from where I sit, it’s UGLY.

but, the band plays on … right?

so, I present, more than likely the most important chart out there .. the banking index.

I had the opportunity and that is what it is .. an an opportunity to sit down w/ JC yesterday and chat … it was blast. but what came to me is while I have all these followers – thank you!- nobody really knows what I’m showing so I’m going to break it down …

BLUE VERTICAL ARROWS – they are measured moves .. every move UP has ended at their conclusion .. so, note around the 155 level – make it simple

DASHED BLACK LINES – just showing you where we take the key nodes and EXTEND from those points … NOTE that 149-155 we have some confluence.

ELLIOTT WAVE – love it, when it works … seriously. if your going to go down that rabbit hole, just learn the corrections … anyway, a VALID (trust me, doesn’t mean it’s a correct count LOL) count shows us finishing 5 waves in around the level sighted before. NOTE – the orange lines is the current wave that we are counting and 1=5 in our target zone.

so, 149-555 BIG DEAL for the financials ….

now .. go on … rock on, capture your stoke folks …

B

the EUROZONE the P I G S and the ECB

CLIFF NOTES: the yields on the Italian and Spanish bonds had a big jump last week. The question is – will the ECM support the bonds?  These are price swings that must be watched closely.  I honestly don’t know IF (the BIG IF) the ECB can support the market but it must be watched.

I’ve attached a chart that was done on the Social Media ETF showing the amazing increase in VOLUME as the sell PATTERN was completing.  Folks, if we took away the price of the EZU and SOCL ETF the volume would almost look exactly the same.  Here’s the picture of the SOCL at the highs:

notice the volume increasing as the "end was near"
notice the volume increasing as the “end was near”

the SOCL is off those highs 30-40%.  Now take a look at the picture w/ the EZU ETF:

notice the volume ..almost exactly like the SOCL.
notice the volume ..almost exactly like the SOCL.

next we overlay the XLF (financial ETF) w/ the EZU and it sure looks like this ETF is one big financial institution – as the banks go, so does the EZU and if you go back some posts you’ll see the XLF completed it’s sell pattern at 22. So …this bears watching. We do have a little more to go for the EZU SELL PATTERN but, w/ the EZU so synced w/ the XLF it might not get there.  Now, the banks could very well EXPLODE UP thru the 22-23 level and the band will play on. But just remember, we are at an inflection point and it’s time to watch this closely ….

EZU w/ XLF overlaid
EZU w/ XLF overlaid

Are the PIGS good to go (Portugal, Italy, Greece, Spain) out of the woods or not…? Believe this upcoming pattern will tell us everything we need to know….