Rate Hikes, Bank Failures Take Center Stage

But Apple's earnings are right around the corner.

Technical Edge — 

• NYSE Breadth: 35% Upside Volume 

• Advance/Decline: 41% Advance 

• VIX: ~$19.50

The market ultimately moved lower and closed near the lows after the Fed’s rate hike and monetary policy update. 

There’s not much time to rest. After the close we’ll get Apple’s earnings (after weak handset commentary from QCOM on Wednesday) and the monthly jobs report on Friday before the open. 

Everyone’s talking about the Fed, but regional banks remain a major issue. Not just because of the rate hikes, but due to the failures. PacWest (PACW) fell 50% in after-hours trading while the KRE continues to melt lower. 

This is an ongoing risk we must be cognizant of as we move forward. Jeffrey Gundlach said last night, “It just seems to me that deposits are going to keep drifting out…I don’t think this is the last chapter in this regional banking problem.”

KRE

Daily on the left, weekly on the right. Notice three straight down days as $42 failed as support. Now trading the 78.6% retracement, let’s see if buyers step in. 

If yes, $40, then $42 are key on the upside. If not, $34 could be on the table. 

This is not a trade setup, just a look at the KRE as it pertains to the S&P.

S&P 500 — ES