Yesterday's 19% swoon in the banking index was enough to trigger a Bollinger band crash trade. You can see from the chart that these crashes are usually followed quickly by a snap back rally. However they have also been followed by more weakness.
The general market obviously needed the banks to rally to have any hope of a sustainable rally. We didn't get it last Thursday or Friday and that led to more selling Tuesday. Finally with yesterday's crash the BKX got oversold enough to bounce.
The question is did today's bounce signal the daily cycle low we've been looking for? Maybe!
I still have concerns though and even if we did get the short term low we were looking for virtually none of the criteria for an intermediate low have been met. So the assumption is that any bounce here will be of the dead cat variety and may be rather short lived.
More details in tonight's update.
Gold Miners - What next?
9 months ago