A Few Fakes and Then Breakaway Speed

We have seen this movie before: Rates spike higher and financials rally, as expected. 

But then the financials lose traction and the trade becomes suspect as banks "squat" back inside their ranges and even threaten breakdowns. 

As evidence of this recurring theme, you will note how sentiment has become all the more skeptical about this latest rally in the banks. Without question, the DB and even CS concerns are adding bonafide evidence to the cautious takes out there. 

But looking at the regional banking sector ETF below, on the weekly timeframe, we also could easily be witnessing a breakout in U.S. financials as rates go higher again, flying in the face of the "here we go again" crowd and the DB issues. 

Note the bull flag breakout, highlighted below, for example, as ushering in a potential new leg higher. The question is would anyone truly be surprised if financials fail again here? Probably not, which is why they have a fighting chance for a surprise move up perhaps into the next FOMC. 

We have a few regionals on watch, as well as some names on the periphery of the sector.