Bank Earnings on Deck

$XLF $KRE

Earnings season kicks off in earnest with the banks this week.

XLF 0.00%↑ broke out of a two year base in April of last year and made a sizable gap up move following the election. It’s given most of it back and sits right near a range where you’d expect earning to either fuel the reacceleration higher, or break down below the boxed range. XLF 0.00%↑ is below a declining 5 day moving average, and the starting point for the optimistic scenario would be change in that trend. Should earnings push XLF 0.00%↑ below the election gap up range, I’d most likely be looking for opportunities to short.

KRE 0.00%↑ is already there -

It’s given back all of the election gap up, and continues to act poorly. MTB 0.00%↑ reports Thursday. It’s one of the larger regional banks within the ETF and should provide a barometer for the direction Regional’s take during earnings season.