{"id":28004,"date":"2026-07-10T07:30:00","date_gmt":"2026-07-10T11:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=28004"},"modified":"2026-07-09T10:25:18","modified_gmt":"2026-07-09T14:25:18","slug":"banks-are-kicking-off-earnings-season-but-theres-an-ominous-sign","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/banks-are-kicking-off-earnings-season-but-theres-an-ominous-sign\/","title":{"rendered":"Banks Are Kicking Off Earnings Season. But There\u2019s an Ominous Sign\u2026"},"content":{"rendered":"

Uh-oh.<\/p>\n

The Bullish Percent Index for the Financial Sector (BPFINA) generated a sell signal on Wednesday. That is an ominous sign as the banks kick off earnings season next week.<\/p>\n

We warned of this possibility just one week ago<\/a>. And, because of the potential for significant downside volatility, it’s addressing this issue again.<\/p>\n

Here’s an updated chart of BPFINA…<\/p>\n\n

\"\"<\/figure>\n\n

As a reminder, 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 most recent BPFINA sell signals. The KBW Bank Index (BKX) declined 5% immediately following the sell signal in January. It went on to fall 15% over the next two months.<\/p>\n

BKX fell 4% in about one month following the sell signal in mid-April.<\/p>\n

And now, we have another sell signal.<\/p>\n

Bank stocks have rallied hard over the past two months. Investors have been piling into the sector in anticipation of record earnings reports. And, when the major banks like Citigroup (C), Bank of America (BAC), Goldman Sachs (GS), and JPMorgan (JPM) report next week, they’ll almost certainly give Wall Street good news.<\/p>\n

The problem is… that “news” is already priced into the stocks. Investors have discounted that potential by buying the stocks ahead of time.<\/p>\n

Once the news comes out, and there’s no one left to buy, traders are likely to hit the “sell” button – creating a sell-on-the-news event.<\/p>\n

The current setup looks eerily similar to how the bank sector looked in January. That was a bad time to buy bank stocks.<\/p>\n

Given the new BPFINA sell signal, betting on the banks right now looks like a bad idea.<\/p>\n

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

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

Jeff Clark
\nEditor, Market Minute<\/em><\/p>","protected":false},"excerpt":{"rendered":"

This indicator generated a sell signal on Wednesday.<\/p>\n","protected":false},"author":2759,"featured_media":0,"comment_status":"closed","ping_status":"0","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-28004","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_content_changed_at":"","ai_tts_content_changed_during_generation":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/28004","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\/2759"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=28004"}],"version-history":[{"count":1,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/28004\/revisions"}],"predecessor-version":[{"id":28010,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/28004\/revisions\/28010"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=28004"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=28004"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=28004"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=28004"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=28004"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=28004"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=28004"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}