Stocks in the finance sector have been strong the last four days with the Insurance SPDR (KIE) showing chart leadership. Note that the Finance SPDR (XLF), Broker-Dealer iShares (IAI) and Regional Bank SPDR (KRE) are all up over the past week, but KIE is the only one trading at a new 52-week high already. This means the KIE chart is the strongest of the group. On the chart below, KIE stalled at resistance in mid August and broke clear with a big move the last three days. The broken resistance zone around 72.5-73 turns into the first support zone to watch on a throwback. The indicator window shows the KIE:SPY ratio breaking out last week as KIE starts to outperform SPY.
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--Arthur Hill CMT
Plan your Trade and Trade your Plan
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