Silicon Valley Bank's Parabolic Rise & Plunge

I initially warned about U.S. bank bubbles bursting on April 10, 2021. My follow-up to that was written on October 15, 2022, which included detailed information on BlackRock Inc.'s (BLK) parabolic plunge.

Since then, we've seen another bank's demise unfold, namely, Silicon Valley Bank (SIVB)...the 16th largest bank in the U.S., and the largest bank by deposits in Silicon Valley.

It's interesting to note how closely SIVB mirrored the movements of BitcoinCOINFNGU (10 Tech FAANG+ stocks ETF), and BLK, as shown on the following monthly comparison chart. They all rose and fell on parabolic movements...indicating a lack of investor confidence in their ability to retain any long-lasting sustainable value.

Their price action has, essentially, moved in lock-step with the S&P Regional Banking ETF (KRE).

Keep an eye on these in the coming weeks, inasmuch as a collapse in SIVB may trigger a contagion to other banks, including KRE, as well as FNGUBitcoin, and other cryptocurrencies and exchanges.

By the way, major support for KRE sits at 50.00, as shown on the following monthly chart. It's had difficulty holding onto, and adding to, gains made above that level since November of 2016.

A break and hold below could see price drop, in short order, to 40.00, or lower.

P.S. KRE gapped down and opened at 44.47 and hit a low of 41.98 in Monday morning trading...it's currently trading at 44.81 at 1:51 pm ET.

The following ZeroHedge articles provide background and current details on Silicon Valley Bank.

Source: ZeroHedge

Source: ZeroHedge

The following daily chart of USDC/USD depicts the de-coupling of the USDC 'Stablecoin' with the USD mentioned in the preceding article...one to watch, as well, for signs of continued or accelerating weakness.

P.S. More updates from ZeroHedge on Silicon Valley Bank...

Source: ZeroHedge

P.S. Another bank bites the dust...Signature Bank (SBNY) has been closed...the 30th largest bank in the U.S., as of last year. The Wall Street Journal reported that, "Like Silicon Valley Bank, Signature relied heavily on deposits too big for FDIC insurance."

The price action in the following monthly chart of SBNY is pretty much identical to the others noted above.

It looks like some (or all) of the DEPOSITORS at SIVB and SBNY will get bailed out by the U.S. Fed and Treasury -- using taxpayers' funds -- as detailed in the following ZeroHedge article...but, INVESTORS will NOT be part of that bailout.

I thought that after the last massive government bank bailout that occurred post-2008/09 financial crisis (for the banks deemed "too big to fail"), they assured American taxpayers that this would not happen again.

Somebody lied! 

If the Fed STOPS raising interest rates because of this situation, you can be assured that inflation will rocket upward...adding to America's already-bloated national security risks.

Will heads roll at the Fed, including Chairman Powell, as ZH is calling for? After all, they (along with politicians' reckless fiscal policies and over-spending sprees, especially under President Biden these past two years) created the conditions leading to these banking failures, inflation, and chaotic mess!

Source: ZeroHedge

ZeroHedge excerpt

ZeroHedge excerpt

ZeroHedge excerpt

Mount Printmore

* UPDATE March 13...

Trading in U.S. markets has been volatile and mixed...as traders/investors try to decipher all available information and consult their crystal ball to forecast various fallout scenarios from this hot mess and position themselves accordingly!


More By This Author:

2023 Market Forecast
2022 Market Wrap-Up: 'Like Watching Paint Dry'
SPX: A 4th Candy Cane For 2023?

Disclaimer: All of my posts (and charts) contain solely my own technical analyses/opinions/observations (which may contain errors or omissions) of a variety of markets and are ...

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