Watch The Bank Index For A Breakout

Above is a weekly chart of the Bank index symbol($BKX) and as you can see this particular group of stocks have been relatively quiet since last fall. The BKX has been in a trading range with a low of approximately 40 and a high of 50.

The Bollinger Bands which track volatility are contracting and are the tightest we have seen in many many months. Usually such a tight contraction often leads to a significant breakout which is why I suggest we keep an eye on this index.

What I am waiting for is a weekly close outside of the trading range. So a weekly close below 40 or above 50 may suggest which way this index will trend next.