Related Topics
Stocks , US Markets
Share This Page         

What Bank Stocks Are Telling You About Stock Market (Again)

KBW Banking Index gave an early warning in 2007 -- here's what it's showing now

by Bob Stokes
Updated: March 26, 2019

The stock market as a whole broke one record high after another in recent years, yet the index of one prominent sector has failed to do so.

I'm talking about the KBW Banking Index, which hit its all-time high way back in February 2007.

Yes, bank stocks underperformed the broad stock market for 12 years. Think about that.

At the time, our subscribers were not surprised. Our December 2006 Elliott Wave Financial Forecast noted:

The KBW Banking Index is now sputtering badly.... [which] points to something much more serious than a brief market correction.

In fact, the index began its bear market eight months before the DJIA, which topped in October 2007.

So, is banking sector weakness always a warning sign for the market as a whole?

Well, financial history generally does not repeat exactly. If it did, market forecasting would be a lot easier.

Yet, you should certainly be in "alert mode" if today's conditions are only just similar to past occurrences.

With that in mind, consider this chart and commentary from our March 22 U.S. Short Term Update, which alerts subscribers to near-term market developments three times a week:

KBWBankingIndex

...the bank index made a countertrend rally high on Tuesday, March 19, and in just four days has declined a whopping 10.7%.

So, the KBW Banking Index has been hit considerably harder than the DJIA, even considering the main index's 460-point drop on March 22.

The action in the prices of bank stocks is only one factor to keep in mind regarding the health of the overall market.

Technical indicators we're tracking are also sending an important message about the timing of the main indexes' next major price moves.

Learn how you can prepare by reading below, risk-free.

"Let's Get Technical"

That's the title of the just-published March Elliott Wave Theorist -- and it's more than worth your time to find out exactly how this "must read" Theorist does get technical.

The wealth of details includes seven charts across multiple time frames -- perhaps most importantly, the new Theorist provides highly timely information on a trend channel of the S&P 500 index.

Again: The trend channel information is time-sensitive!

Learn how you can find out what you need to know now by taking advantage of our 30-day, risk-free trial. Details are below …


Elliott Wave International’s Financial Forecast Service

All month long, FFS shows you the patterns in U.S. stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. We show you where the trend is now, and when prices should turn -- specifically, we show the pattern at multiple degrees of trend, with precise risk/reward calculations. If you have fewer surprises, you can be better prepared.

Here’s how it works:

 

1

Subscribe now and read the current issues within FFS.


 

2

Fine-tune your portfolio plan.


 

3

Relax. Watch the markets with your targets in mind.




Your Financial Forecast Service Team Helps Put YOU in Control of the Market’s Trends and Turns


Your Financial Forecast Service guides -- three of the best-known market analysts in the world:

  1. 1. Robert Prechter, Author of 16 market-related books, New York Times Best-Selling Author and Editor of Elliott Wave Theorist
  2. 2. Steven Hochberg, Editor of the Short Term Update and Co-editor of The Elliott Wave Financial Forecast
  3. 3. Peter Kendall, Author of The Mania Chronicles and Co-editor of The Elliott Wave Financial Forecast

As featured in:



Here's what you get with the Financial Forecast Service


Every Month

At the end of each month, you get a 30-60 day look ahead at the markets. Elliott Wave Financial Forecast lays out expected trends and turns in stocks, gold, USD and bonds.

Three Days Per Week

At market close every Monday, Wednesday, and Friday, you get the Short Term Update, alerting you to what’s changed and what’s upcoming in the next several days.

Latest Research

Every month, Robert Prechter sends you his latest research about waves of social mood in the markets in the Elliott Wave Theorist, so you always know the full picture.


You can be ready for risks and opportunities that catch most investors by surprise


Risk-Free, Start Your Subscription Now

$69

for 1 month of unparalleled market insights