Banking sector continues to disappoint, BKX new lows

The banking sector represented by the BKX index has poked a new low today, thereby eliminating the immediate time frame Elliott Wave count (and continuing to disappoint the markets - no wonder VIX has crept up some more and equities indices are weak).

Although there is a hint of RSI divergence, the other indicators continue to look bad. From an Elliott Wave perspective, I would have to count the move down from 45-ish as the initial wave for a conclusion to the larger Elliot Wave C down. It shouldn't be much of a surprise as the bounce up from the prior low didn't show the confirming characteristics. The one good thing, if we can call it that, is that this opens up the door to the possibility of an ending diagonal in the smaller time frame. IF that happens, it will first be quite wearing on the investment community at large, since a diagonal is a frustrating pattern for most traders while it is occurring. Only when it is ready to conclude - which is readily identifiable with a wedge pattern - would it then make a good vehicle for most swing traders.

So we'll continue to keep an eye on it. Meantime, continue to be careful out there, happy trading!