Banks/Financials – July 27, 2023

Saw the gap up today – pretty darn impressive – so I immediately went to the XLF and “figured” that it would have gapped up w/ everyone else and blew over the .786 retracement and off to the races. IT DID NOT. Hmmmmm

Because of that, I cruised around JNK, XLF, $BKX and KRE and saw a lot of TIME convergences and SELL PATTERNS completing ….add that to the amazingly insanely bullish sentiment out there and, well, is this is easy as it looks to get long, set it and forget it?

Not until the financials and Junk Bonds show strength and really rally …until then, I’ll hold my powder w/ regard to the broad equity indices.

WATCH THESE PATTERNS for a clue to what is next.

The banks/financials ALWAYS lead us UP and, also, lead us DOWN.

for the two charts above, note the TIME component of the ABCD “basic” projection …

below is the KBW Banking Index. Same picture but spent a little bit more “time” on the “time” aspect (get it, that was supposed to be funny) and noticed that, since, basically, last year the TIME component of pullbacks have been pretty consistent (see blue arrows) and, now we have an ABCD in price and time along w/ some other “basic” static cycles.

the other thing I want you to study is the “fractal” nature of these two patterns.

pretty key level for the Banks/Financials:

Junk Bonds have tried to break out 8 times from the .618 level. If they break down below the gap zone shown, this could be a big deal. Note the green horizontal lines – no swing low has been broken since Oct 2022. So …. keep an eye on the Junk Bonds

Goldman Sachs – March 11, 2023

Very important support comes in for GS a little lower in/around the 320’s and then 300’s. We lose those levels then expect GS to breathe down to a VERY NICE BUY PATTERN from 243-247.

That buy PATTERN is a classic.

ABCD, .618 retrace, 1.27 extension and then the “crossover” structure .. dare I say, it’s a near perfect set up.

Which, like I always mention … can and does fail so that is the line in the sand for GS and, potentially, the entire banking system. (?)

Goldman Sachs

we had a VERY nice pattern coming in around the 370’s and it’s basically failed.

as you can see the high was a 1.27*ab=cd but w/ this strength thru the lower pattern that failed, would WAIT for a daily close below 372 before putting any type of short out there …

w/ the strength in the financials and the Banking Index (shown below) I would be hard pressed to put a short on w/ regard to the banks until the target above is hit … we hit that target, could be game on.

GS Goldman Sachs Target HIT

last post on GS: https://bartscharts.com/2021/03/17/goldman-sachs/

monthly SELL pattern on Goldman complete.

note the thrust into this level .. begs of caution so either WAIT for a daily (<362) or weekly (<350) signal reversal candle to initiate a short OR HERE but out above 377.

either way, when you have multiple monthly projections and extensions all coming together in/around here one should take notice.

of course, it certainly can blow thru this level to the upside (it’s only probability) but this is some very STIFF areas of resistance so only time will tell.

also, for those who might understand why I write the following OR want to go and dive into a rabbit hole … 373 is a prime number. we’ll leave it at that …

Bart

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