“No Bull Market Without The Banks” Bull$#@!?
The old adage is in my opinion not relevant anymore. Sure we would like to see their inclusion in any market rally, but it is not necessary. Going back some years, the banks were a big reason for the selloff, as the S&P 500 rose just 3.5% in 2007 and fell 38.5% in 2008, the financial group were the worst major S&P sector performers down 18.6 and 55.3% respectively. But just like anything else once something becomes widely known, its edge disappears. A good example would be last year when in 2020 the S&P 500 rose 16.3%, but the XLK fell 1.7%. This year so far give the XLF credit as it is the second-best major S&P sector actor, advancing 24%. Is it a signal that market participants believe rates are going higher? Of course, no one knows for sure, the only evidence I follow is PRICE action. The group will be helped further along with a break above a 356.95 cup base pivot for GS. Remember that will aid not only the finnies, but the DOW too as the index is price-weighted, and Goldman is the highest PRICE name in the benchmark.