{"id":38614,"date":"2018-10-03T06:11:07","date_gmt":"2018-10-03T11:11:07","guid":{"rendered":"http:\/\/olduvai.ca\/?p=38614"},"modified":"2018-10-03T06:11:07","modified_gmt":"2018-10-03T11:11:07","slug":"banks-sputter-after-hawkish-fed-raises-rates","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=38614","title":{"rendered":"Banks Sputter After Hawkish Fed Raises Rates"},"content":{"rendered":"

Banks Sputter After Hawkish Fed Raises Rates<\/a><\/h3>\n

\"\"<\/strong><\/span><\/span>In March we warned of continued Fed\u00a0rate hikes<\/a>. In May, we reported on more rate hikes and their\u00a0potential impact<\/a>on stocks. In August, the\u00a0QT<\/a>\u00a0\u201ctime bomb\u201d started ticking\u2026<\/p>\n

On Wednesday, the Fed\u00a0raised rates<\/a>\u00a0for the eighth time since tightening started. But the\u00a0KBE Bank ETF<\/strong>\u00a0\u2014 which holds Bank of America and Citigroup among others \u2014 failed to rally.<\/p>\n

This could be a sign of an alarming trend beginning to unfold.<\/p>\n

On\u00a0CNBC\u2019s \u201cTrading Nation,\u201d<\/a>\u00a0equity strategist Matt Maley warned that even though the markets are rallying, the KBE Bank ETF hasn\u2019t:<\/p>\n

\n

\u201cThe thing that concerns me is that not only has it been stuck in a sideways range as the market has rallied all year but now in the last couple of weeks it\u2019s dropped below its 200-day moving average. This has been key support for the group,\u201d Maley told CNBC\u2019s \u201cTrading Nation\u201d on Tuesday.<\/p>\n<\/blockquote>\n

You can see the dire trend Mr. Maley alludes to unfolding in the chart below\u2026<\/p>\n

<\/p>\n

After the Fed stopped Quantitative Easing (QE) back in October 2017, three critical revelations happened that can be seen in the chart above:<\/p>\n

    \n
  1. \n
      \n
    1. The KBE Bank ETF has dipped close to the 200-day moving average twice, but in recent months has been\u00a0repeatedly<\/strong>\u00a0dipping\u00a0below<\/em>\u00a0the average.<\/li>\n
    2. The KBE Bank ETF has rallied 3 times since October 2017, but\u00a0each rally has been weaker<\/strong>\u00a0and doesn\u2019t maintain levels reached since 2017.<\/li>\n
    3. The\u00a0black arrows<\/strong>\u00a0indicate each rally getting more \u201csideways,\u201d and overall staying sideways after the 3rd rally.<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

      This unfolding trend comes at a time \u201cwhen things should be positive for the group,\u201d according to Maley\u2019s analysis.<\/p>\n

      At the time of this writing, all bank share prices in the ETF were still dropping, some over 2%. It\u2019s \u201cboom or bust\u201d for the banks, according to the\u00a0CNBC report<\/a>.<\/p>\n

      \u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

      Banks Sputter After Hawkish Fed Raises Rates In March we warned of continued Fed\u00a0rate hikes. In May, we reported on more rate hikes and their\u00a0potential impacton stocks. In August, the\u00a0QT\u00a0\u201ctime bomb\u201d started ticking\u2026 On Wednesday, the Fed\u00a0raised rates\u00a0for the eighth time since tightening started. But the\u00a0KBE Bank ETF\u00a0\u2014 which holds Bank of America and Citigroup […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[63,18769,303,2468,431,534,1138,3650],"class_list":["post-38614","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banks","tag-birch-gold-group","tag-fed","tag-interest-rate-hike","tag-interest-rates","tag-monetary-policy","tag-stock-market","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38614","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=38614"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38614\/revisions"}],"predecessor-version":[{"id":38615,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38614\/revisions\/38615"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=38614"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=38614"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=38614"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}