Chart of the Day - Bank stocks testing support

The banking sector is critical not only to the economy but also the financial markets including the stock market. So it's timely to take a look at a chart alert being put out by Chart of the Day on the banking sector. When price tests a trend line or even better a parallel channel line type of trendline, it's important to know. The first reaction is to look for support to give a bounce - and we've seen that! If price reverses down again and loses that support, that's a bearish sign. The euro did that recently and I'm definitely looking for whether its current bounce take it back for a mere retest or can it regain and get back above that channel line on my monthly chart. Anyway, back to the banks - let's keep an eye on their progress. And for the big-picture look, here's the view from http://www.chartoftheday.com/20100709.htm?T

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For some perspective into the all-important banking sector, today's chart presents the current trend of the KBW Bank Index. As today's chart illustrates, banking stocks were trending upward from late 2005 into early 2007. Then the impact of an already weakening real estate market began to take its toll and ultimately led to a historic financial crisis which led to banking stocks plunging at an ever-increasing rate. Beginning in early 2009, banking stocks surged and then setteled into an upward sloping trend channel which continues to this day. It is worth noting, however, that the KBW Bank Index is currently testing support of its 14-month trend channel.

Notes:
- Where's the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron's recommended charts of Chart of the Day Plus.

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Quote of the Day
"A bank is a place that will lend you money if you can prove that you don't need it." - Bob Hope

Events of the Day
July 13, 2010 - Baseball All-Star Game
July 14, 2010 - Bastille Day (France)
July 15, 2010 - British Open golf tournament begins (ends July 18th)

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