29Aug1:11 pmEST

The Stock Market Recruits a New Driver

 

Do you remember the drill with the banks? They tend to catch a nice bid as rates eventually edge higher. 

Financials are leading today, on the back of a potentially hawkish Fed (also opposed to the bluffing one we are used to). 

While there are plenty of skeptics regarding whether The Fed can actually muster the, shall we say, intestinal fortitude to truly raise again, banks are buying into it for now. 

Also note the XLF (financial sector ETF), below on the monthly chart, the massive triangle dating back to the pre-debt crisis highs is likely to make its break here. 

Against the backdrop of a Fed bluffing or not, this is a fascinating setup insofar as discerning if this breakout in banks is in the top of the first inning, or instead is the head-fake which sets up a fresh leg lower. 

All we can do is take the action in the market one day at a time. And today the market is buying into it. 

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