Banks Depositing Gains:

Since 2012 when the XLF was the best acting major S&P sector, its behavior has been a bit more mediocre. It put up a 3rd best finish in 2016, but other than that the advances were lukewarm at best. That has all changed this year as the XLF is the second best major S&P sector out of 11 on a one week, one month, three month, six month and YTD timeframes. It has little chance of catching technology this year as the two are separated by 13 percentage points. The XLF is higher 8 of the last 9 weeks, and is tacking on another 1.5% this week with one session left. It is more than likely to record its third WEEKLY CLOSE above the round 30 number tomorrow, and it has demonstrated solid follow through after a break above a very taut 3 week period, as the weeks ending 11/8-22 all CLOSED within just .17 of each other. Below we take a longer look at the XLF on a MONTHLY chart, and this just broke above a cup base, which have been very accurate at forecasting firm gains going forward. Another 50% run is easily in the cards over the next 3 years if history rhymes.

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