Citigroup's a Leader? Get it in Writing

The recent strength in most big banks has masked a few of the more concerning spots in the finance sector, namely the KRE (regional bank sector ETF) underperformance a well as the Well Fargo scandal and subsequent fallout. 

While JPM rally from June into July was impressive, the notion that Citigroup was the sector leader seemed tough to swallow, given both the WFC issues as well as the many fits and starts Goldman Sachs' stock experienced. 

Just recently, for example, while Citi (C) was hovering near multi-year highs, GS was swiftly rejected at $235 and WFC broke back under all major daily chart moving average. In addition, the KRE has been just as technically weak as WFC of late.

Note that the KRE and now XLF weakness is happening as TLT catches a bid on the back of the Fed Minutes yesterday where we caught a glimpse that the Fed is not in a rush to keep on raising rates this year. As TLT goes higher, rates come down, which generally is not what banks favor (at least that is the knee-jerk reaction). 

In sum, large banks look more like shorts than longs into the end of summer, at least until the Fed talks a more hawkish game, assuming the market would believe it at this point.