The Poor State of the Banks: A Look at $KRE, $JPM and $WFC

About a month ago, I took a look at the terrible structure on WFC, and in looking again at it since then, it’s not in any better shape now than it was. And KRE isn’t in any better shape, either. And now even worse, as stocks like JPM rallied during this period where it scooped up failed assets of some regionals and had a big earnings beat, even it is starting to show some cracks, from a technical perspective.

So I thought I would take a few minutes to run through each of these again in a post just on banks.

I have already discussed KRE recently (here), and in that article, I revisited the giant head and shoulders pattern that I first pointed out Twitter (before it fell another 20% into its recent low). What that looked like in that May article, after the latest plunge, was this:


It never actually quite met the measured move:


Instead, it’s just had this bounce/consolidation. If we zoom in though, we now get to ask this important question:

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So, we have to see. If the recent drop isn’t complete, it’s not going to take much to lose a really important place.

So KRE might be in trouble. And so might be WFC, just from a charting perspective. In my last discussion of it (here), I pointed out how it looked like death. And, truth be told, it hasn’t done much to improve that yet.

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So this, too, at least has the potential for quite the swan dive from here. I’m not saying it will, but boy if something like that is going to happen, it’s from a structure like that that it would happen. So it might happen. And “AI” isn’t going to be able to save us from that lol.

One last one. JPM has been strong, good earnings, sure the regionals aren’t doing as well, but the biggest baddest bank is still ok, right?

Maybe, maybe not so fast. While up and away, JPM has at least produced this:

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So, just thought I would add these 3 ideas to the thoughts discussed already in this weekend’s longer post. None of these look particularly good. And I doubt very much that the markets can do very well without the banks. So if these play out, trouble may be ahead. Significant trouble. There’s no guarantee these will play out. But, they look awful now until they don’t. So, I remain on high alert and continue to favor the bearish case in part because of these.

One final note for members: some folks have pointed out to me that logins from Patreon do not persist, and that you often have to re-authenticate. I apologize profusely for that poor user experience. I actually had no idea. I had heard a couple things over the last couple years, but since the reports were rare, I thought those were isolated incidents. But after asking around, I now believe that experience is more widespread. You guys are so kind and polite, that too few of you have complained about it, and I didn’t even understand the scope of the issue until yesterday. I’m very sorry for that.

I don’t think that’s how it should work. I think you should only have to authenticate about once-a-month, and credentials should be stored in a cookie. So, I’ve reached out to some folks to see what I can do about that. And I’ll have more news on that soon.

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