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Stock-Market Bulls Want To See This Index Breakout

Published 10/17/2019, 01:40 PM
Updated 07/09/2023, 06:31 AM
SPY
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BKX
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KBW Bank Index (top), Bank:SPY Ratio

One of the stock market's most important sectors is the banking industry and bank stocks.

When banks are healthy, the economy is likely doing well. And when bank stocks are participating in a market rally, it bodes well for the broader stock market.

In today’s chart, we look at the Bank Index (BKX).

As you can see, the banks have been in a falling channel for the past 20 months. The banks have also been lagging the broader market during this time – see the SPY ratio in the bottom half of the chart above.

That said, the Bank Index has put together a short-term rally that is threatening to break out of these falling trend channels.

If dual breakouts take place, a strong bullish message would be sent to the banking sector and the broader market too.

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