The earnings reports from companies roll out in earnest this week and the banks are one of the largest question marks. This performance chart shows all the major banks and brokers underperforming the $SPX since the test of the May high failed in June.
This creates a defensive posture and the banks will need to change this trend if we are going to see better price action in the Indices. JP Morgan (JPM) kicks it off tonight.
Note that Goldman Sachs (GS) and Morgan Stanley (MS) have underperformed the large banks. This will add increased scrutiny to the brokerage earnings as they are typically considered a leading indicator.
Good trading,
Greg Schnell, CMT
About the author:
Greg Schnell, CMT, MFTA is Chief Technical Analyst at Osprey Strategic specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA).
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