Banks With the Best Prospects

Banks have the best prospects of a follow through in the short term, as market cycles play out this week. Transports, Energy, and Industrials are nearing cycle peaks. The overall market is pressing higher, in this current bullish cycle that started in late August. NYMO is still cycling through zero (moving average), so breadth confirms the current price action.

NYMO-09-13-2017

Banks and XLF Show Promise

We are looking for short/intermediate term trades on banks at the present time. The current cycle shows a tradeable low and is still developing, so expect some volatility. That said, a number of big banks are showing institutional interest as blocks and options flow is building.

XLF

We bought some Bank of America on Tuesday, reflecting on this perceived bullish options flow and block trades that continued throughout the day. Citigroup also showed a lot of interest.

BAC-09-13-2017
Courtesy Wall St Jesus

If price action breaks above this upper trend line (60-min chart) we will likely see a quick pop above recent pivots, with a short term target of 24.72. Note major support is just below at 23.80 (VBP). A drop below this zone (23.60) would stop us out of the trade. BAC reports earnings on October 16.

BAC-60min-09-13-2017

Many other sectors are witnessing bullish flows that have yet to dissipate, so we are anticipating the current up cycle will continue, at least until we see a change of slope in the bottom panel.

NYSE-Coppock-09-13-2017

Individual sectors are starting to hit extremes in their cycles. Breadth, in particular, has risen to previous extremes fairly rapidly, so we feel it’s prudent to start reducing position size again as we press higher.

NYSE-HiLo-09-13-2017

Once HiLo percent reaches 90, we will once again be setting up for a 1-2% pullback in the short term. Plan for it.

Happy Trading,

Vinny

We will be LIVE at 9:20 AM



Disclaimer:  Do your Own Research
Our content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on our Website and wish to rely upon, whether for the purpose of making an investment decision or otherwise.
Investment Warnings
We would like to draw your attention to the following important investment warnings. The value of shares and investments and the income derived from them can go down as well as up; Investors may not get back the amount they invested – losing one’s shirt is a real risk; past performance is not a guide to future performance.

 

 

Vinny Gambini

Trade Fundamentals w/ Technical Analysis - CANSLIM method using high probability setups and Ichimoku Trend Analysis. Architect, Family Man and Father of three.