Summer 2007 Equity Peak Call - Banks and Breadth and Where We Stand Today

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Financial Select Sector SPDR F / Technical Analysis

<a href="https://www.smartkarma.com/entities/financial-select-sector-spdr" target="_blank" rel="noopener" data-smartkarma-citation="entities:27538:1">Financial Select Sector Spdr (XLF US)</a> was used as a market health bellwether in 2007 to pinpoint relative bear signals that preceded a broader SPX bear market and the insight in July 2018 <a href="https://www.smartkarma.com/insights/summer-2007-equity-peak-call-banks-and-breadth-and-where-we-stand-today" target="_blank" rel="noopener" data-smartkarma-citation="insights:21821">Summer 2007 Equity Peak Call - Banks and Breadth and Where We Stand Today</a>  warned of market internals beginning to flag warning signals of a bigger cycle top in 2019 if banks continued their path of structural underperformance. This exercise of deteriorating breadth then saw core sectors such as transports and small caps raise more red flags in 2018 and progressed into 2019. Breadth has been a core underlying bear concern in late 2019.Breadth signal are exhausting to the downside in April with a micro positive undertone in line with our call for an April low and absolute rally into May. Breadth will then show weaker signs into the summer lead by core underperform sectors.We look at the UK banking sector breakdown that mirrors or follows the bear cycle in European banks and focus on the lag in US banks, macro relative breaks and absolute levels in US banks that warn of new lows in the SPX (after a counter trend rise in May).Summer is our next hot zone as credit concerns heat up.

Financial Select Sector Spdr (XLF US) was used as a market health bellwether in 2007 to pinpoint relative bear signals that preceded a broader SPX bear market and the insight in July 2018 Summer 2007 Equity Peak Call - Banks and Breadth and Where We Stand Today  warned of market internals beginning to flag warning signals of a bigger cycle top in 2019 if banks continued their path of structural underperformance. This exercise of deteriorating breadth then saw core sectors such as transports and small caps raise more red flags in 2018 and progressed into 2019. Breadth has been a core underlying bear concern in late 2019.Breadth signal are exhausting to the downside in April with a micro positive undertone in line with our call for an April low and absolute rally into May. Breadth will then show weaker signs into the summer lead by core underperform sectors.We look at the UK banking sector breakdown that mirrors or follows the bear cycle in European banks and focus on the lag in US banks, macro relative breaks and absolute levels in US banks that warn of new lows in the SPX (after a counter trend rise in May).Summer is our next hot zone as credit concerns heat up.

US Bank Relative Breakdown from 2018 Did Follow the Path of 2007