Watch the bank index for clues about the direction of the market

The bank index is important because banks caused the mess we are in and banks will lead us out of it.

Bank stocks have gone nowhere since early April (click on chart to enlarge). They hit the resistance level (blue line) and retreated. On 5/20 they sagged 2.39% while the S$P 500 declined only 0.51%. They have been weaker than the market for a while. They will tell us the direction of the overall market.

There is another idea that bothers me. Will all the major players sell ahead of the end of the quarter to lock in the profits to show the great gains they had in Q2?

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977