KRE, the regional banks ETF, is taking the pipe after the Silicon Valley Bank and Signature Bank failures. America's crony capitalism system is under stress with the H&S (head and shoulders pattern) failing at the neckline last week.
The neck is at 57 and top of head at 77 so that is 20 difference. If the neckline at 57 fails, the downside target for the H&S pattern to play out is 37. Price drops to 42 so far.
The chart indicators on the KRE weekly chart remain weak so the expectation is that the 37-40 area will be visited in the days or couple-few weeks ahead. Price is in the neighborhood. If you see 42 lost, then 37-38 will be on the table as per Keystone's 80/20 Rule.
The US Housing Market has been in recession since Christmas. Interestingly, the regional banks write most of the US mortgages. It is like two drunks trying to hold each other up in Times Square on Saturday night. The housing market is sick because people are running out of money and their jobs are shaky so their house plans are on hold, while at the same time, someone ready to buy a home has to deal with banks under stress and may be seeing their bank of choice name dissed and plastered across a television screen. Housing Starts hit at 8:30 AM EST Thursday morning so be there or be square.
KRE will likely provide a buying opportunity going forward but for now it is a no-touch. If sub 40 occurs, and especially the 37-38 H&S target, that would be a better time to go sniffin' around the regionals for opportunities. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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