Update on the Banking Index
Positive news flow has allowed the KBW Banking Index (BKX) to push above the channel resistance near 25.50 I pointed out last week. This is a notable achievement, as long as it holds its gains to the close. But additional challenges remain because the index is now just 2 points under 50-day EMA resistance, the February swing high and the 38% retracement of the 2009 selloff.
In addition, the index has yet to print a single higher low off the bear market low at 17.75, posted on March 6th. That omission leaves it vulnerable to a deep retracement and trading range that could carry through first quarter earnings in April.
Finally, the index is still trading under the broken November 2008 low at 33. Until that major resistance level is mounted decisively, banks remain firmly entrenched in historic downtrends.
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