What’s up with Regional Banks?

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

I have been watching the Regional Banks ($KRE) since the bounce in October, but it has been hitting resistance at July-September highs. This has added quite a bit of volatility in November. This type of action in the regional banks is a flag for action in small-caps ($XLF). This is due to the finance sector being the largest sector (25% weighting) in the Russell 2000 iShares ($IWM).

It is worth mentioning that the Regional Banks are trading where they were nine months ago. There has been over seven price swings over the last eight months. Today’s latest swing puts the sector at moment-of-truth. The ETF for Regional Banks ($KRE) is right at support in the $39.5. If the stock can hold $40 this would be a bullish catalyst for the regional banking sector, as well as the small-caps ($IWM).

In closing I want to wish you all a Happy Thanksgiving! See you next time at the Corner on December 1st.