Banks and the Dow
10 Jul 2020 ● 07:22 AM
US banks are leading the way lower and if they keep dropping at some point the market is going to recognise a problem in the financial system. The divergence between financials and tech is getting start. In fact tech is the only index at new highs as seen on this chart
The Dow Jones bank index is going the other way. and close to where it will break the risking trendline for the advance since the March bottom. This is what is driving the recent under performance of the broader indices.
The Dow itself has an island reversal pattern. While this exists on the S&P as well the gap got filled on the S%P. The Dow is trading below the gap zone and so the gap zone at 26300-26600 is acting as a resistance. On the lower end the trendline of the lows at 25146 is the support base you do not want to break.