“Depositing” Gains?
Unless one has been living under a rock since the start of 2025 they would know the defensive stance the market has taken. As of Wednesday’s CLOSE, the best-performing major S&P sectors were utilities, staples, healthcare, and real estate, followed by the financials. Not endearing to growth investors, who are looking for some reversion to the mean from tech and discretionary which make up the cellar. The daily chart below of the XLF shows it taking baby steps toward potential leadership with a reversal off the 21-day EMA and 200-day SMA. A break above 49 would put an end to lower highs in 2025 and put a double bottom pivot of 51.01. It is also no secret that domestic banks have been underperforming international with the ratio chart against Europe via the EUFN showing a stiff downtrend since last December. Perhaps US banks are ready to start showing some strength against their European counterparts with the bullish hammer candle on the MONTHLY ratio chart and with some more follow through will carve out a double bottom base. Everyone likes to cite JPM and GS which are of course important, but BRK/B is still the top holding in the XLF at 14%, and April recorded a bearish hanging man candle.