Best of the Week
Most Popular
1. Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - Nadeem_Walayat
2.Gold Price Focusing on May Cycle Bottom - Jim_Curry
3.Silver, silver, and silver! There’s More Than Silver, People! - P_Radomski_CFA
4.Is the Malaysian Economy a Potemkin Village - Sam_Chee_Kong
5.Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - Troy_Bombardia
6.A Big Stock Market Shock is About to Start - Martin C
7.A Long Term Gold Very Unpopular View - Rambus_Chartology
8.Stock Market “Sell in May and go away” Study When Stocks Are Down YTD - Troy_Bombardia
9.Global Currency RESET Challenge: Ultimate Twist - Jim_Willie_CB
10.The Coming Silver Supply Crunch Is Worse Than You Know - Jeff Clark
Last 7 days
More Clarity for the Short Term for Bitcoin Price - 22nd May 18
Study: A Rising and Strong U.S. Dollar Isn’t Consistently Bearish for the Stock Market - 22nd May 18
Gold, Silver & US Dollar Updates with Review of Latest COTS - 22nd May 18
Upside DOW Stock Market Breakout May Be Just the Beginning - 22nd May 18
5 Reasons Why Forex Trading Is Becoming Such A Big Deal In SA - 22nd May 18
Fibonacci And Elliot Wave Predict Stock Market Breakout Highs - 21st May 18
Stock Market Ideal Cycle Low Near - 21st May 18
5 Effects Of Currency Fluctuations On The Economy - 21st May 18
Financial Conditions are Still too Easy for the Stocks Bull Market to End - 21st May 18
US Stock Market Elliott Wave Predictions for 2018 and Beyond - 20th May 18
Are You Still Fearful of Cryptos? - 20th May 18
US Stocks - Why I am Short-term Bearish, Medium-term Bullish - 20th May 18
Looking for a Turn in Gold Price - 20th May 18
GDX Gold Mining Stock Fundamentals 2018 - 19th May 18
Semiconductor Stock Market Canaries: Chirp, Warble… Soon a Croak and Silence? - 19th May 18
Three Drivers of Gold Price - 18th May 18
Gold Market in First Tertile of 2018 - 18th May 18
What Happens Next When Small Cap (Russell) Leads the Stock Market - 17th May 18
Negative Signs for EUR/USD? AUD/USD - Battle - 17th May 18
DOW Jones and CRUDE Oil on a Cliff Edge, Waiting for a Nudge! - 17th May 18
Gold Price No More Subtleness – It’s Show Time! - 17th May 18
VIX Cycles Point to Stock Market Correction - 17th May 18
Trump Sounds End Times Armageddon Trumpet for Jerusalem, Israel Evangelical Prophecies - 16th May 18
Our Next Stock Market Dow Fibonacci Price Targets – Get Ready! - 16th May 18
The Coming Copper Crunch - 16th May 18
Stock Futures Are on a Sell Signal - 16th May 18
What to do When the IRS Comes for Your Property - 16th May 18
IS BITCOIN ANONYMOUS? - 16th May 18

Market Oracle FREE Newsletter

Trading Lessons

KBW Bank Index Extended Correction

Companies / Banking Stocks Apr 14, 2017 - 09:33 PM GMT

By: ElliottWave-Forecast

Companies

KBW Bank Index is an economic index consisting of the stocks of 24 banking companies delivering a direct exposure to the banking sector and  offering a targeted view to a unique corner of the U.S. financials sector. The top holdings Banks of the index are among the biggest financial institutes in the world and most of them will report earning during this week ( Citigroup, JPMorgan Chase, Wells Fargo, Bank of America). These companies have a big influence on the financial sector that can be measured by the ETF (XLF), which was up 30% from last year until last month, we mentioned in our previous financial article that XLF was reaching an inflection area which provided the expected pullback.


How this move is affecting the Banking sector ? Let’s find out by using the Elliott Wave Theory to analyse BKX.

KBW Bank Index Elliott Wave View

BKX made 5 swings bullish sequence from 2009 low which is different from the 5 impulsive waves used in Elliott Wave Theory. The advance is a part of the double three structure that KBW Bank Index is doing and after reaching the 61.8 – 76.4 fib ext area it started the 6th swing pullback against 2016 low. The retrace in wave ((X)) would ideally reach the 50%-61.8% Fibonacci retracement around 78.11 – 72.94 area before BKX can resume it’s move to the upside. However market isn’t perfect and we can’t determine how the pullback will unfold exactly so even a small 3 waves pullback can be enough to end it there.

To determine the potential pullback area, we take a look at the daily chart as the Index ended the 2016 cycle at 03/01/2017 peak from which it’s started a Zigzag structure. So BKX can still extend lower toward equal legs area 81.84 – 79.10 from which it can resume higher or bounce in 3 waves at least.

If the bounce is not strong enough and the Index fails to break above 99.84 peak, then it will have the possibility of doing the double three correction lower toward the 61.8%-76.4% area and retesting the 2009 trend-line before it can be able to resume it’s uptrend.

Recap

KBW Bank Index longer term technical structure remain bullish while it’s holding above 2016 low 55.99. But we need further data before we can determine if the index will be able to rally for new highs after this current shallow daily correction or it needs more time to consolidate. This decline will affect the whole Financial sector and its stocks can be fading the so called Trump rally so you need to be careful about holding a bank stock during this pullback.


For further information on how to trade forex, indices, commodities and stocks using Elliott Wave technique ,  try us 14 days for FREE . You will get access to our 52 instruments updated in 4 different time frames, Live Trading Room and 2 Live Analysis Session done by our Expert Analysts every day, 24 hour chat room support and much more so if you are not a member yet, use this opportunity and sign up to get your FREE trial .

By Ayoub Ben Rejeb

https://elliottwave-forecast.com

ElliottWave-Forecast has built its reputation on accurate technical analysis and a winning attitude. By successfully incorporating the Elliott Wave Theory with Market Correlation, Cycles, Proprietary Pivot System, we provide precise forecasts with up-to-date analysis for 52 instruments including Forex majors & crosses, Commodities and a number of Equity Indices from around the World. Our clients also have immediate access to our proprietary Actionable Trade Setups, Market Overview, 1 Hour, 4 Hour, Daily & Weekly Wave Counts. Weekend Webinar, Live Screen Sharing Sessions, Daily Technical Videos, Elliott Wave Setup .

Copyright © 2017 ElliottWave-Forecast - 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.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

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

6 Critical Money Making Rules