Today, many of the leading financial stocks have caught a bid to the upside. Almost every trader and investor knows that the leading financial stocks have been extremely weak since late April, 2020. Since that high pivot in the big banks, the sector has really struggled. In fact, if you look at the SPDR S&P Bank ETF (KBE) you will see that this ETF has sold off by $8.00 in the past two weeks. Every seasoned trader knows that the financial stocks need to be leaders in the market if the overall markets are to advance. A weak financial sector is almost always a negative for the major stock indexes.
This morning, J.P. Morgan Chase & Co (JPM) and Wells Fargo Co (WFC) actually caught a bid higher when the major stock indexes were plunging lower. This is a change in character from what we have seen in the financial stocks recently. In fact earlier today, Wells Fargo stock made a new 52-week low before surging to the upside and going positive by more than 6.0%. Either way, that is a bullish move today, but we will need to see more in the coming days.
Traders and investors should note that tomorrow is options expiration for the month of May. This is notoriously a week of institutional game playing. Once options expiration concludes it will be very important to see how the financial stocks react on the charts.