It Ain't Just the Regional Banks

Not only are the regional banks, housed in the KRE sector ETF, a lingering issue conveniently ignored by equity and credit bulls alike, but now we have the larger banks weakening alongside them. 

Yesterday we saw the KRE act poorly at prior support and largely unnoticed as NVDA, the FOMC, oil, and other topics grabbed headlines. Today we have the KRE following-through lower as I write this with the XLF (larger bank ETF) down by nearly 1.2% as prominent leaders like JPM are off by more than 2%. 

Zooming out, the picture is even more ominous. 

On the XLF weekly chart, below, the large banks are displaying what many other sector and indices have flashed of late: A long-running bearish RSI divergence to divergence (bottom pane) to price relative to the March/April highs. 

While the CPI and FOMC remain question marks, with many expecting more of the same this summer and even into the end of the year, with very low volatility and an endless low volume drift higher, I continue to see valid and significant RSI divergences which I will respect until they are negated.