Global equity indices continue to show evidence of improving after 20-months of sideways to down price action, the so-called “going nowhere” market. The Standard & Poor’s 500 index is again testing the upper end of a broad 2018-2019 consolidation range, while emerging and European markets seem to exhibit signs of completing cycle lows. In the short-term, I expect some backing and filling following the recent broad market rebound back to resistance. The far more important point is that the cycle backdrop is steadily improving.

Of course, the ongoing US-China trade discussions and this weekend’s Brexit vote remain obvious binary events facing equity markets. Despite those concerns and weak economic macro data, most cyclical groups reflect a healthy progression from bear trends to bullish trends. I have illustrated the incremental improvement in this space over the past few months by highlighting a progression of leaders to laggards in semiconductors, truckers to large-cap cyclical bellwethers (JPM, ITW, CAT).

I’m shifting my focus this week to banks, which are following the same bullish pattern that is consistent with a broader cycle backdrop transitioning into another 4-year bull market cycle. See chart below. In the top panel, the high-quality leader JPM, is ...

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