Technical Strategy Video (Recorded Tuesday, October 12th):

The video in this report is only accessible to members
The video in this report is only accessible to members

Key Takeaways

  • Money Center banks look technically more appealing than Investment Bank/Brokers (JPM, BAC better than C)
  • Treasury yield breakout has driven outperformance in Regional Banks, and this looks to continue in the months to come. This should favor the Super Regionals (CMA, SIVB, PNC, USB) which remain one of the best areas in Financials
  • Exchanges, Payment processors, Insurance, and Trusts also showing excellent strength and should be favored

Financials, shown in Equal-weighted form (RYF) to strip out the large influences of Berkshire, JP Morgan and Bank of America, just pushed back to new all-time highs last week, one of the few major sectors to have accomplished this feat. The relative chart of RYF/RSP (shown in white) peaked this past Spring when interest rates made a minor top, then bottomed in July as rates also bottomed. Given that Treasury yields look to continue higher in the months to come, it looks likely that Financials should continue to be favored as an overweight, technically.

The video in this report is only accessible to members
US 10-Year Treasury yields likely to slowly trend up to 1.80%. Looking at TNX below, yields broke out in mid-September which result...

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