Remember Me: Benny Blanco from the Bank?

Much like Benny Blanco from the Bronx, this failed bounce in the regional banking sector ETF (KRE, daily chart, below) looks to have come home to roost for bulls. 

Specifically, with all that is going on in the world, and in other markets besides equities, it has been quite easy to assume the worst is over for the vulnerable regional banks. However, let us not forget it was only earlier this year that the likes of Silicon Valley got into sudden, extreme trouble which required immediate intervention on the part of both the Treasury and Fed. And that was due to the spike in rates since 2021. 

Since March, rates have only gone higher, which suggests more skeletons are hiding in the closet of this sector. 

Beyond that, the lack of panic or capitulation in the sector is also troublesome. If anything, my view is that we are still seeing complacency en masse in equities. 

All of this adds up to continued risk pointing substantially lower, with these seemingly daily (even multi-day) bounce attempts running into the law of diminishing returns and merely postponing the inevitable. 

Tonight's earnings slate: GOOGL MSFT SNAP V, should begin to settle some debate whether or not the economy is truly slowing as some (Bill Ackman) would suggest. But don't overlook the lingering risk in regional banks. The lull since Silicon Valley in March is not unlike Bear Stearns in 2008.