{"id":22335,"date":"2024-12-03T07:30:52","date_gmt":"2024-12-03T12:30:52","guid":{"rendered":""},"modified":"2024-12-03T07:30:52","modified_gmt":"2024-12-03T12:30:52","slug":"lets-bet-against-the-banks","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/lets-bet-against-the-banks\/","title":{"rendered":"Let\u2019s Bet Against the Banks"},"content":{"rendered":"

It’s time to bet against the banks.<\/p>\n

Bank stocks have been on fire in 2024. The Financial Select Sector Fund (XLF) is up nearly 40% this year. It has been leading the stock market higher.<\/p>\n

Now though, the sector is overbought. And, the bullish percent index for the financial sector (BPFINA) is about to generate its fifth sell signal in two months.<\/p>\n

Look at this chart of BPFINA…<\/p>\n

\"chart\"<\/a><\/p>\n

A bullish percent index (BPI) shows the percentage of stocks in a sector that are trading in bullish technical patterns.<\/p>\n

It’s an easy way to measure overbought and oversold conditions for a sector. Typically, a reading above 80 – meaning 80% of the stocks are trading in bullish technical patterns – means a sector is overbought. Readings below 30 indicate oversold conditions.<\/p>\n

Buy and sell signals occur when a BPI reaches extreme levels and then reverses.<\/p>\n

For example, when a BPI rallies above 80 and then turns lower it generates a sell signal. When a BPI dips below 30 and then turns higher, that’s usually time to buy. At least, those are the general rules.<\/p>\n

The red arrows on the chart point to the three BPFINA sell signals this year. You’ll notice the sell signals appear in clusters – with three near the start of the year, three in March, two in May, and four sell signals clustered over the past two months.<\/p>\n

Here’s how the KBW Bank Index (BKX) performed following the previous clusters…<\/p>\n

\"chart\"<\/a><\/p>\n

Following these “cluster sell signals” BKX declined 3% in two weeks in February, 7% in three weeks in April, 5% in three weeks in June, and 9% in two weeks in August.<\/p>\n

We now have a cluster of four sell signals over the past two months. And, when the BPFINA turns lower again from its current overbought condition, we’ll get a fifth sell signal. That could happen as soon as today.<\/p>\n\n\n\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Since the BKX declined to slightly below its 50-day moving average following the four previous times the index was in this condition, it’s likely we’ll see similar action on the next decline.<\/p>\n

In other words, it looks like the banking sector is setting up for at least a 10% decline.<\/p>\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark
\nEditor, Market Minute<\/em><\/p>\n

P.S.<\/strong> I just put out a trade to take advantage of this to subscribers of my entry-level service Jeff Clark Trader<\/em>.<\/p>\n

I identified the trade using one specific pattern… my “magic pattern,” which has spotted winning trades for consistent gains like 152%… 222%… and even 329% in just days. Check it out right here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The banks sector is overbought \u2013 here\u2019s what to do.<\/p>\n","protected":false},"author":46,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-22335","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/22335","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/46"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=22335"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/22335\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=22335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=22335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=22335"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=22335"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=22335"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=22335"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=22335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}