KBE - S %& P Small Bank ETF LONGKBE is an unleveraged bank ETF which on the 60 minute chart is currently trending with a buy
signal from the machine learning algo indicator. Banks are reporting. Interest rate changes by
the fed are flat for the time being. The volume profile shows KBE took a dip to try to fall back
into the high-volume area and bounced. It has recovered from a VWAP band breakdown
correcting from the 3rd upper band to the first upper band. The dual time RSI indicator
shows the faster RSI line crossing over the slower RSI line and both in the healthy 60 range.
I see this as a buying opportunity on KBE and will also take a look at DPST. I see price as
targeting the February 23 high about 20% upside.
KBE
XLF - Looking Very WeakFinancials charts have completely been rejected by the downscoping trend line.
A weekly bear flag looks like it's about to trigger and send price action much lower.
Since the daily chart is getting oversold, waiting for bearish consolidation is a wise decision if you are wanting to short.
With the rise in yields recently, it's clear the Banks net interest margins are being squeezed. Will we see another banking crisis?
The last time we saw the XLF close below the weekly 50MA, we saw a quick 10% drop.
WFC setting up a VWAP bounce LONGOn this 4H chart, I see WFC having had a bit trend up and then a retractment through the
upper anchored VWAP lines toward the mean running VWAP where I expect a bounce.
At present, price action is in a bit of a flat bottom triangle. The ZL MACD supports this
impending reversal with bullish divergence in the line cross under a histogram which
went red to green. I will take a long trade here with a stop loss under the histogram
and a target just below the pivot high in mid July. I will zoom onto a 30 minute time
frame to better select an optimal entry on the reversal. I will check banks in general
including the ETFs KRE KBE BNKU and DPST.
DPST a triple leveraged bullish ETF for Regional Banks LONGWhile tracking regional banks DPSt had a bad time in the spring with the
small and regional bank failures/rescues and the federal actions to buttress the faith of
citizens in them. There has been no runs on the banks. Larger banks may be taken
some business from small banks sattled with securities with diminished
value due to rising interest rates and the effect on the face value of those
fixed-rate securities. No matter, things are better now. This is not to say
the whole banking sector stress is resolved. Banks have enjoyed great
returns on credit cards. The 15-minute chart here shows a good overall
uptrend within ascending parallel support and resistance trendlines.
Price is presently at the bottom of that parallel channel. The relative
trend index signal is near zero meaning at least in this instance trend
is fairly quiet with low volatility. Relative strength lines have bounced
up from the lows of about 20 and now are in the 40-50 range.
Overall, I see this as a good entry point for a long-swing trade targeting
the top of the channel which I estimate will be about 100 buy the
end of next week estimating the trade duration to be 5 trading days.
My reasonable opinion is that next week's volatility will be far less than
this past week and that DPST will do well. I will also take a look at
the KRE and KBE ETFs. I like this as a long setup with a 15% potential
for a ver low risk in a stop loss set $.50 below the channel.
Bank Stocks Are Back To Bullish ModeBank stocks have collapsed back in March, but don't forget that markets go from pessimism (fear) to optimism (greed) and vice versa. Looking at the KBE (Bank Sector ETF) chart, we can see a completed three-wave A-B-C corrective decline after a five-wave rally, which gives us a nice bullish setup formation. So, after reaching important 78.6% Fibonacci retracement and GAP from November 2020, we may easily see bulls back in the game, especially now that is trying to break first bullish evidence level. However, keep in mind that bullish confirmation is only above channel resistance line and 50 region, while it's above the 30 invalidation level.
US banks face large capital increases under final Basel plan.
KRE a banking sector ETF for regional banks LONGWhile tracking regional banks KRE had a bad time in the spring with the
small and regional bank failures/rescues and the federal actions to buttress the faith of
citizens in them. There have been no runs on the banks. Larger banks may be taken
some business from small banks saddled with securities with diminished
value due to rising interest rates and the effect on the face value of those
fixed-rate securities. No matter, things are better now. This is not to say
the whole banking sector stress is resolved. Banks have enjoyed great
returns on credit cards. The 15-minute chart here shows a good overall
uptrend within ascending parallel support and resistance trendlines.
Price is presently at the bottom of that parallel channel. The relative
trend index signal shows bearish trending today providing confirmation of
of a dip which is now available as an entry point. Relative Strength Indicator
which compares with the SPY showing persistent strength
Overall, I see this as a good entry point for a long-swing trade targeting
the top of the channel which I estimate will be about 52 by the
end of next week estimating the trade duration to be 5 trading days.
My reasonable opinion is that next week's volatility will be far less than
this past week and that DPST will do well. I will also take a look at
the KRE and KBE ETFs. I like this as a long setup with a 15% potential
for a very low risk in a stop loss set $.50 below the channel at 47.84
I have uploaded a similar idea on DPST.
BNKD Is the banking crisis still simmering?Recently, a report posted on the Social Science Research Network found that 186 banks in the
United States are at risk of failure or collapse due to rising interest rates and a high proportion
of uninsured deposits.Jun 14, 2023
BNKD, the banking bearish and leveraged ETF has dropped in trend down in the past month
albeit with some upgoing corrections along the way. GS, JPM and MS are all uptrending as an
with DPST high jumping in the past day. On the 2H chart, BNKD is in deep oversold
undervalued territory at or below more than two standard deviations below the mean VWAP.
However:
(1) the mass index indicator popped into the reversal zone and then dropped below the trigger
level of 26.5. I see this as a mathematical prediction of a soon impending reversal.
(2) the dual time frame RSI shows the lower TF blue line bounced from the lows and the higher
TF is flat not showing further weakness. I consider this a subtle bullish divergence.
(3) Importantly the red line in the sand here is the POC line of the visible range volume profile.
Price is presently supported by that line showing buyers taking a defensive stand at that level.
Overall, I will take a long reversal trade here targeting the middle of the first upper deviation
band at 12.0 with a stop loss at 8.88. This is a high potential reward of 35% for a small risk
taken. The reward on an options trade would potentially be well over 100%. I will zoom into
a 15-30 minute time frame to select a pivot low to make a more precise entry.
KBE ( in top of ascending channel ) is ready to shortKBE on the one-hour chart has been in a rising parallel channel for a month. It is now near the
the top of the channel having pivoted within the past few trading sessions. The MACD which is
no lag shows a line cross above the histogram while the RSI is topped out as it was on May 23rd
the most recent previous pivot downward. I see this as a short setup. The stop loss is at
the recent pivot high while the target is $35.15 at the bottom of the channel and somewhat
confluent with the POC line of the volume profile which is a natural bounce and reversal
value. I would also short the banks by going long on BNKD which adds the extra risk and
potential reward of leverage ( see that idea)
Is it time to short the big banks with BNKD again?As shown on the 4H chart BNKD, a triple leveraged ETF inverse to big bank stocks has had
ups and downs reflecting the chaos in the banking system with some failures and federal support
or takeovers. Online banks are thriving while some smaller regional banks are challenged with
a portfolio of bonds and treasuries bearing low yields. Price is presently at the same level
as the high of December 22 and low of April 23. This level is acting as support also allowing for
a narrow stop loss for a long trade. Price is below the high volume area of the long term
volume profile which equates to the fair value area. Accordingly, BNKD is oversold and
discounted below fair value into the undervalued range. It is below the mean anchored VWAP
line and in the area of one standard deviation below that line. The zero-lag MACD shows an
early impending cross of the lines under the histogram another suggestion of a reversal
I will take a long trade with the stop loss directly below the horizontal support line by
$ 0.25 while the first target just below the confluence of the POC line and the mean VWAP
@ $.13.90 while the final target is $ 15.60 near the top of the high volume area. I see this
as a safe long trade with a high R:R and profit potential.
BAC rising from support LONGBAC on the daily recently descended from an asymmetrical head and shoulders pattern
near to or in the supply zone as indicated by the Luxalgo indicator down into the demand
zone in late March and early May for a double bottom. Fundamentally, the banking system
has been propped up by the federal central banking mechanisms and the situation seems to
have stabilized. DPST and KRE banking ETFs have had some good days of late. On the chart
the Luxalgo Echo indicator, a predictive algorithmic tool, suggests that BAC will rise during this
summer and then bounced down from the resistance of the trendline of the neck of the
asymmetrical H & S. I can easily conclude that BAC is ripe for a long trade. I will take
an out of the money call option for DTE 9/20 striking #37.00. I will set the stop loss at
20% - Of the 15 contracts, I will close 2 after each 20% profit level is achieved and expect
to make overall 150-250% by mid-August. Because of time decay, I will not carry these
open beyond September 1st.
KRE Is a reversal underway?KRE the regional bank ETF is down about 50 % YTD, with a couple of bank failures leading the
way. The question that arises is whether there is more downside. Faith and trust in the
the banking system is at risk. The big banks came in their rescue on First Republic. A run on
the little banks can hurt the big banks even Goldman Sacks. Holding treasuries with fixed
rates lower than current rate sucks for sure. The fed will clean up this mess and will
do it right and has started that process. KRE chart with the fisher transform indicator
and the zero-lag MACD tells me that KRE is now " reverting to the mean" & dropped below
the Fibonacci bands of the basis EMA. Line crossovers on the indicators are confirmatory.
I will seize the situation and add to my long position. Due you agree that this is picking low
laying fruit?
Capital One....technical Breakdown loomingWith major weakness in the banking sector we are still seeing the contagion play out. Some banks are more at risk than others.
Based off of a blow out in Credit Default Swaps. The bond market is showing there is tremendous risk in this bank.
Just like Credit Suisse CD's blew out befroe the collapse, we are watching COF credit defaults blowout.
KBE Banking Sector ETF Long Swing LongKBE is in the middle of a beatdown with two of the biggest bank failures in history this week.
The share price action is reflecting overall distribution. The moving averages ( SMA 100 and SMA 200) are
parellel and not crossing. Today, the price action had a little pullback on the drop and perhaps an
early sign of reversal or at least the end of the trend into a consolidation. Price action today
is a symmetrical triangle at the POC line suggesting some dynamic stability and perhaps a pause
awaiting a reversal.
My idea is to buy weaknesses and later sell some new strengths ( or at least the weakness fixed).
Dip buying ( pull backs on the big picture) has risks associated with the rewards.
This would be with shares on the way down ( or a call option ) getting cheaper and cheaper buyers
and then start selling once shares are 10% above the cost and calls 25% above their cost once
the reversal is trending. ( Another idea is to buy a given dollar amount of shares and then 5%
as much dollar amount in put options two strikes above current price with DTE 3/24) as a
hedge ( insurance on risk).
You decide - SVB Financial collapse - who is to blame?A lot of talk on who is to blame for the SVB Financial collapse – this is the first big casualty of rapid rate hikes and tighter policy, but who is to blame and what are the next steps?
-SVBs management – they invested short-term deposits in longer term fixed income assets – where a large % of its $120b securities portfolio lacked any kind of interest rate hedge (payers swaps were clearly needed)
-SVBs management – In the past 8 months SVB had no risk manager - fortune.com - no one knows how they efficiently managed risk
-SVBs management – the accounts showed they held $91b of its $120b securities in its HTM (assets Held to Maturity) book – these are assets they intend to hold until maturity but the accounting rules detail, that they don’t need to mark-to-market the moves in the underlying and report the ballooning losses – which again were not hedged.
-SVB deposit mix - 93%+ were above the FDIC insurance limit – this makes depositors v sensitive to any capital concerns at the bank
-SVB deposit mix - VCs had a rapid cash burn, as projects they back are typically driven by changes in interest rates (think Net Present value and Internal rates of return) – depositors took cash off SVB’s balance sheet to fund operations – SVB subsequently had to sell assets as their liabilities fell – we then see realised losses from buying securities at much higher prices.
-Short sellers/investor base – shorts had an eye on unrealised losses from the worsening asset quality for weeks – the selling accelerated when the CEO/CFO/CMO disclosed they’d sold a chunk of stock on 27 March – it was over when the SVB took a $1.8b hit on its AFS securities available for sale on Wednesday – management sold $21b of its $28b book and announced a $2.25b in equity/debt raising - investors knew with conviction that depositors were fleeing – who supports a raising when liabilities are falling – no one sensible, raising pulled
-The Fed - failing to know such a shift in rates would impact banks asset quality when its primary function is financial stability.
-Regulation - Basel 3 - banks being forced to buy govt paper against deposits - v low risk weighting (perhaps required a hedge
Hard to pinpoint this on one aspect IMO - I think there is a perfect storm going on – a lack of hedging of interest rate risk was clearly a dominant factor behind this. Top down this is a function of rapidly tightening monetary policy and the impact this had on both the asset quality and liability side of the balance sheet – we should recall SVBs model is not the same as others in the banking space, so its hard to say this is systemic – still we wait for the outcome on next steps on how deposits over $250k will be dealt with – we’re hearing they may get 50% back initially but a buyer would be the best solution
The issue for regional/smaller banks comes if is we see some sort of haircut on the deposits claim over $250k – that could see a loss of confidence in holding deposits with other smaller banks names – we shall hear more soon, but broad contagion through the financial system seems unlikely, but it is a possibility given nearly 1/3 deposits in the banking system are uninsured – any bank with a large asset base and low equity are in the spotlight
As said Friday this could be a nothing burger or have real impactions on economics - the big issue happens this week if we see no clarity on how depositors are dealt (seems unlikely) with and we get a hot CPI print
SIVB Meltdown- Canary in the Coal mind?Today we saw a systemic risk in the financial sector. The regional banks were hit extremally hard and as a result the Major banks saw sell side liquidation.
Where there's one cockroach, there's usually another.
Risk in the banking sector is the worst type of risk investors can ask for. Credit liquidity crisis is not something to mess around with.
SIVB looks like its in serious trouble potentially being exposed to fraudulent crypto loans that will likely default as well as failed speculative startups in the tech and health care space.
go long HBANTCF bank began merging in to Huntington Bank after receiving shareholder approval, ticker HBAN, in March of 2021 with the intention of being completed within the year. This will put it in the top 10 regional banks and will rank 5th in 70% of deposit markets. Regional banks are set to benefit from rising rates and inflation. The cost synergies and the ability to more heavily compete with the larger regional banks should provide it a runway to longterm growth. In the meantime, while these changes take place you will collect a 3.8119% quarterly dividend and have time to accumulate shares.
"Cost synergies are anticipated to be around $490 million, or 37% of TCF Financial's non-interest expenses. Per Huntington’s expectations, the deal is likely to be 18% accretive to earnings by year-end 2022, including the fully phased-in transaction cost synergies." -yahoo finance
It has been in a period of consolidation/trading sideways but I expect it to began to break to new highs as strengths are combined and weak branches are closed. It has underperformed in comparison to the KRE which is a proxy for the overall regional banking sector. This trend should reverse.
www.prnewswire.com
www.freep.com
ridethepig | Banks vs Utilities It ought to be known by everyone that it is necessary in certain recessions for dead cat bounces and over a typical 5 quarter economic cycle down, it is not uncommon for 1 or 2 of those quarters to be bullish. I suspect that the strength around all the discounted earnings from August is mostly baked in now.
The concern, in the MT and LT, is the 2's 5's screaming recession is not over. Such a devastating blow that will have appeared too simple for many participants as Central Banks did not allow the manoeuvre to unfold yet. Here sellers should try to seize the lows; no matter how risk free the current environment may seem; confidence is damaged and civil unrest is in the game. I do hope my judgement of this is not over will be proven wrong, and that it really is different this time.
As usual thanks for keeping the feedback coming 👍 or 👎