Bouncing Banks? August 8th, 2020

The US markets closed higher on the week with the IWM small caps ETF joining the party and moving above the June highs. With all of my breadth data, absolutely everything is positive here. My SSIH indicator moderated marginally, still at a blazingly solid 97.6 %. I here all the noise around me about topping but the price and momentum action continue to say higher.

Breadth is currently rock solid. Bonds made a very important hammer candle this week giving some reasons to
be be bullish the banks. The Bank ETF was up on the week nicely. This bond hammer follows last week’s Fed meeting, so this is a bullish time to look for changes.

Oil names were resilient this week with oil bouncing around. After BP and Exxon announced, the markets had lots to talk about. I have been discussing Natural Gas and it had a furiously good week, up 24%!

Last week I mentioned the Yen, but nothing happened on that front this week. The Nikkei didn’t go anywhere so no news on either Japanese front after the big moves last week to close out the month. I was impressed with the
Shanghai bouncing nicely this week, but that didn’t seem to encourage copper. We’ll be watching for copper to get back in sync this week.

Summary: The market keeps working its way higher. The Canadian market moved up against resistance, but it looks like the commodities and the banks could roll forward this week, which should give it the momentum to go higher. The US markets continue to rage forward. Transports, oil, Natgas, banks, utilities, semi’s, tech, utilities were all pushing higher. Like the natural lazy river ride in the photo above, it’s a nice place to be participating.

Let’s jump into the charts.

Bouncing Banks