Banks Have Not Participated In This Rally
Here's a group of stocks I will be watching in the days to come as potential shorts.
Above is a daily chart of the BKX (banking stocks). Below that is a ratio line of BKX vs SPX. Notice how the red line is trending downward which indicates how weak these stocks are compared to the S&P.
In the lower pane is the MACD oscillator which is already on a sell signal.
I have no short position in these stocks at the moment but if the BKX can break the trendline or move below 116, I may consider shorting this group.
The reason I'm posting this chart now even though I have no position in these stocks is because anybody can write a post AFTER the fact once there is a big move in the market. That's useless information to you. What I've always done was share with you what I am looking at BEFORE these stocks make a move so that maybe you can anticipate what will happen and plan accordingly.
I think part of being a good trader is having a game plan and then taking action if the market proves you correct in your analysis. If the bank stocks explode higher from here I will do nothing but if I see some weakness coming into this group I will consider shorting these stocks.
Posts
![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_4.gif)
![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_4.gif)
![[Most Recent Exchange Rate from www.kitco.com]](http://www.weblinks247.com/exrate/24hr-euro-small.gif)
2 comments:
Kevin -
I've just recently started reading your blog, and wanted to let you know how much I dig it. I've been reading through old posts of yours and am pretty impressed by how astute you've been.
Definitely agree that silver is heading up short term. Not sure if it'll break through to new all time highs though, but there's room to go before hitting the old high.
One thing regarding your silver/gold ratio chart - since silver is more voltatile than gold it would make sense that as $XAU rises silver outperforms, and when it falls silver underperforms.
Hey Brian,
Thanks for the nice comments...Yes it is true that silver is more volatile than gold..The point I was trying to make with my chart was that the silver/gold ratio was at a level where it should rally which means we should be buying silver.
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