KRE trade ideas
Hedging A Black Swan: KREI believe now is the appropriate time to begin hedging for huge Black swan style events. This near vertical run in the KRE banking index is now above the 07 highs. It tried to break above the +8 year long channel but failed. I expect a much lower retest. At the very least, I believe low delta long duration put options on this ETF to be a very cheap trap that others may suddenly decide they need in their portfolio.
KRE, Banking Momentum Diverges From "reality" Slowly scaling into financials. I admit I may be booking myself into the spa for a "face-lift" but the risk reward seems skewed in my favor to take a stab here.
Regional Banks vs. XLFSeems like something to watch... optimism around higher rates and repeal of Dodd Frank has regional banks outperforming a ton. Shorting some of the highflying regional banks vs. the big boys might be in order. Here is showing ETF vs. ETF, however a basket of the highest flying names vs. going long XLF and/or KRE might make for a better trade.
Megaphone pattern KRE bearish money flowConfirm sell signal on daily. short Bank stocks Money flow breach
$KRE Long Regional Bank IdeaI think that anyone wanting to enter the Regional Bank space ahead of a potential rate hike - here is your opportunity.
The Best Leading Indicator Now: SPDR KBW Regional Banking (ETF) Everyday on financial news outlets we hear different market opinions and predictions. These "experts" get in front of the camera and tell us where they think the markets are headed, whether the economy is on solid footing or not, what the fed's next move might be etc. Most often, these "predictions" are made based on fundamentals which lag the real market action. Remember, if you are going to trade based on the earnings report of a company or other financial reports, this information is almost always baked into the cake before its released to the general public. One thing we know, which has been proven over time, is that the charts tell the story of the future, far better than any talking head in the media or falsified financial report. With that in mind, I will detail out one of my current tools which help to gain a peek into the future; the SPDR KBW Regional Banking (ETF) (NYSEARCA:KRE).
After looking at the chart of the SPDR KBW Regional Banking (ETF) (NYSEARCA:KRE), I found it to be quite interesting and ahead of the markets to the downside. We have all heard how in 2007 the markets topped out and then rolled over in the fall of 2008, as Lehman Brothers went under. The SPDR KBW Regional Banking (ETF) (NYSEARCA:KRE) had peaked out many months before the S&P 500, in fact it topped in December of 2006 (almost 1 year ahead). In 2010 this ETF put in a high basically around the same time as the rest of the major indexes, and then the S&P 500 had a 17% correction. However, in 2011 the Regional Banking ETF made its high early in the year (January 2011), while the markets didn't top out until May 2011. That high was followed by a decline in the S&P 500 to the tune of almost 22% (some say bear market status).
Since then the SPDR KBW Regional Banking (ETF) (NYSEARCA:KRE) has basically been in lock-step with the overall markets and had a nice ascent higher. That is until a few months ago when it made a high of $42.79. This security has since made a lower high and has clearly diverged from the S&P 500. You can even make a case that there is a potential head and shoulders being formed on the daily and weekly charts (depends where you draw your neckline). All these facts I have presented have nothing to do with fundamental analysis and is purely based on technicals and chart reading. So while the pundits and talking heads on TV carry on with their opinions, I will look to the charts as the real crystal ball, and eliminate all that white noise. Keep a close eye on the KRE chart as it appears to be talking to us right now.
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BAT PATTERN Long @ 37.50Coming off 52 week highs for the identified 'XA' leg. 37.50 is clean support on both daily and weekly charts.
There is also very nice bullish momentum divergence seen on the Mac-d histogram.
Enter Long just in front of the 'D' point at 37.55
Stop Loss below 'X' point around 36.60
My initial Profit Target will be 38.75 which should see resistance with second profit target being the 'B' point @ 40.35
KRE has a date with $43The banking stocks have been on fire lately and even though the KRE trades almost 3 Million Shares in a day, I think it is headed higher. Today we saw a trader buy 10,000 plus KRE April 44 Calls for $.31 which was a $300,000 investment. The investment seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of an index derived from the regional banking segment of the U.S. banking industry. KRE has a date with $44 so I am long the KRE April 44 Calls for $.31
