KRE Regional Banks ETF Weekly Chart; H&S; Positive Divergence Setting-Up

The regional banks sh*t the bed yesterday the KRE ETF takes the pipe collapsing -9%. Overpaid bigshot Jamie Dimon at JPM must have been spinning yarns when he said the coast was clear after the Fed handed First Republic's goodies over to him on a silver platter. He is singing for his dinner. Too big to fail (TBTF) banks become bigger. Crony capitalism coughs and wheezes.

The prior KRE charts said to wait for the 38 or lower print and it finally arrives yesterday. The weekly chart indicators were weak and bleak so a 5th grader knew that price would continue falling on a weekly basis and anyone that wanted to play a quick relief bounce would have to be very nimble. Price comes down to a low at 38.11. A little California Hustle and Flow.

Price makes the new low so the indicators can be assessed for possie d. The histogram, stochastics and money flow are positively diverged ready for KRE to recover on the weekly basis (green lines). The oversold RSI and stochastics are also agreeable to upside going forward. Conversely, the RSI makes a new low ditto the MACD line. Their weak and bleak posture want another lower low for price going forward on the weekly basis.

A jog move is likely needed where price will bounce next week and then roll over again for another low say a couple weeks out and at that time the RSI and MACD will likely turn possie d and that will be the bottom on the weekly basis. Thus, if you want to play the regionals long, wait for 1 to 3 weeks for the bottom to form on the weekly and then, even in choppiness, price will float higher for several weeks.

There is more pain for a week or three due to the weak MACD. The H&S (head and shoulders) remains in play with neckline at 56.30 and head at 76.30. The difference is 20 so the downside target for the H&S is 36.30 if the 56.30 fails and it did. The low is 38.11 in the neighborhood so price may want to explore the 36 handle as it bottoms over the next couple weeks. The indicators will ALL form possie d which will tell you that the firm bottom on the weekly basis is in.

Keystone does not hold any positions in the banks right now but will probably look at a long in KRE once it sets up in a couple weeks. The utilities have failed which is a bad omen for the US stock market so of course if the whole ship starts going down the tubes everything will drown. For now, the analysts with calmer heads, such as Larry Summers, are likely correct in saying that the regional banking crisis is manageable and that should be proven when KRE price bottoms in 1 to 3 weeks. 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.

Note Added Friday Morning, 5/5/23, at 4:58 AM EST: Happy Cinco de Mayo. KRE sh*t the bed yesterday printing not only the 36-handle but a 35-handle and yes, an intraday 34-handle with the low at 34.52. The regional bank worries escalate. They are looking like dead men walking as the corrupt crony capitalism system pushes money into the handful of major banks which will also make it easier for the Federal Reserve to move into digital money. It is sickening stuff but this is what happens as a multi-decade stretch of greed and crony capitalism implodes. If you bring up the KRE weekly chart, the low comes with the weaker RSI and MACD so the analysis above remains in play with a bottom likely 1 to 3 weeks away. You have to wait until all the indicators are possie d to know that a multi-week rally is on the come. On the KRE daily chart, there is universal positive divergence across all indicators so she will want to bounce and recover in the daily time frame. New news may hit the wires creating more negativity but the panic and fear is likely at its crescendo right now for the regionals. Selling volume hits a record high yesterday for the year so traders and investors are panicking and selling first and asking questions later. There is downside momo on the daily chart so there still may be a day or two of sogginess but she wants to rally in the daily time frame. The KRE 2-hour chart is setting up with possie d but the MACD line wants to see another low in price in the hourly time frame before it will team-up with the daily chart to create a brief, several-day relief rally. KRE will rally and then the daily chart will set up with neggie d to spank it back down and fulfill the desire of the weekly chart that wants to see a lower low in price a week or two out due to the weak and bleak RSI and MACD line. This 34.52-38.00 range is likely a good candidate for a bottom but it will take a couple weeks for it to be set in stone on the weekly basis. The possie d on the weekly chart will tell you when she is ready to rally on the weekly basis (you need to see the RSI and MACD line join the other indicators in positive divergence sloping higher against the falling KRE price).

Note Added Friday Morning, 5/5/23, at 7:00 AM EST: There are many idiots wanting to see the short-sellers prohibited from trading in the banks. It is laughable. Many of these morons will tout capitalism and their request is the opposite of capitalism (they are too stupid to understand what they are saying?). Further, short-selling was prohibited in banks in 2008. Do you remember that or are you stupid? It did not work then and only led to more headaches. There are plenty of ways for professional traders to short banks via derivatives. It is fascinating to watch. The reason the country is collapsing is because of the demise of the crony capitalism system and all the dishonest idiots, to the very end, will want the government and Federal Reserve to always guarantee protection for their money and life, which is the opposite of capitalism. The rot is so deep it is unfixable. More banks should have failed in 2008/2009 but instead the wealthy class was protected by the crony capitalism that is now in its final throes.

Note Added Saturday Morning, 5/6/23, at 8:00 AM EST: The regionals rally big on Friday so the possie d on the daily chart kicks-in.