Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
FOMC Minutes Reveal an Important Shift That’s Key for Gold, Too - 22nd Nov 19
Adaptive Predictive Modeling Suggests Stock Market Weakness Into 2020 - 22nd Nov 19
Why You Should “Follow the Money” on The Yellow (and Silver) Brick Road - 22nd Nov 19
This Invisible Tech Stock Threatens Amazon with 800,000+ Online Stores - 21st Nov 19
Crude Oil Price Begins To Move Lower - 21st Nov 19
Cracks Spread in the Precious Metals Bullion Banks’ Price Management System - 21st Nov 19
Why Record-High Stock Prices Mean You Should Buy More - 20th Nov 19
This Invisible Company Powers Almost the Entire Finance Industry - 20th Nov 19
Zig-Zagging Gold Is Not Necessarily Bearish Gold - 20th Nov 19
Legal Status of Cannabis Seeds in the UK - 20th Nov 19
The Next Gold Rush Could Be About To Happen Here - 20th Nov 19
China's Grand Plan to Take Over the World - 19th Nov 19
Interest Rates Heading Zero or Negative to Prop Up Debt Bubble - 19th Nov 19
Plethora of Potential Financial Crisis Triggers - 19th Nov 19
Trade News Still Relevant? - 19th Nov 19
Comments on Catena Media Q3 Report 2019 - 19th Nov 19
Venezuela’s Hyperinflation Drags On For A Near Record—36 Months - 18th Nov 19
Intellectual Property as the New Guild System - 18th Nov 19
Gold Mining Stocks Q3’ 2019 Fundamentals - 18th Nov 19
The Best Way To Play The Coming Gold Boom - 18th Nov 19
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19

Market Oracle FREE Newsletter

$4 Billion Golden Oppoerunity

SPDR KBW Regional Bank Best Performing ETF

Companies / Exchange Traded Funds Jan 26, 2010 - 02:30 PM GMT

By: Guy_Lerner

Companies

Sorry for the catchy headline, but the SPDR KBW Regional Bank ETF (symbol:KRE) has been my best performing ETF since I first highlighted the sector back on November 18, 2009. KRE is up about 16% since then while the S&P500 has remained flat.

I bring KRE up not because I want to pat myself on the back, but because CNBC's Maria Bartiromo made this comment last Thursday as she was going to a commercial break and I paraphrase:


"When we come back from the break, we will discuss whether it is time to buy the regional banks."

Of course, Thursday was the day President Obama announced a plan to regulate the big money centered banks or those that are "too big too fail". This apparently gave a lift to the regional banks, which were up about 4% for the day while the broader market was in a swoon.

When I hear comments like Maria's, I know it is time to sell as CNBC is very good at being late to the party, and her comments had me running to the computer to pull up the chart. From an intermediate term perspective, this is probably the case; KRE has run into resistance and we can see this on the weekly chart. See figure 1. Resistance comes in at 25.22, which is a key pivot point. Thursday's high was 25.09. In this difficult tape, I would expect KRE to struggle at these levels. In other words, a pullback should be expected before moving higher.

Figure 1. KRE/ weekly

The range of the negative divergence bar - labeled in pink with blue up arrows - should serve as support and resistance. The low of this price bar is at 23.30 and the high is at 25.09. A weekly close below 22.43 would bode ill for KRE.

Lastly, all the reasons why Maria wasn't touting the regional banks several months ago still exist. Exposure to commercial real estate, increasing home foreclosures, and high unemployment have not disappeared, and although these factors have been stated risks for the regional banking sector, they have yet to rear their head. Maybe now will be the time.

In any case, I would not look to chase KRE higher in such a weak market. Longer term I still expect KRE to work its way higher.

    By Guy Lerner

      http://thetechnicaltakedotcom.blogspot.com/

      Guy M. Lerner, MD is the founder of ARL Advisers, LLC and managing partner of ARL Investment Partners, L.P. Dr. Lerner utilizes a research driven approach to determine those factors which lead to sustainable moves in the markets. He has developed many proprietary tools and trading models in his quest to outperform. Over the past four years, Lerner has shared his innovative approach with the readers of RealMoney.com and TheStreet.com as a featured columnist. He has been a regular guest on the Money Man Radio Show, DEX-TV, routinely published in the some of the most widely-read financial publications and has been a marquee speaker at financial seminars around the world.

      © 2010 Copyright Guy Lerner - All Rights Reserved
      Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

      Guy Lerner Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

milo
28 Jan 10, 22:44
stocks chart

that chart looks horrible and like it is turning up after a huge loss, or it says 22 years to get even if the secular bear theory holds true against the buy and holders in at the top....


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules